PB Video Analysis: The UK Economy – It’s Not About The Brexit

November 21st, 2018

From the outside the UK economy looks pretty healthy. Unemployment is low and economic growth has been more consistent than any of its EU peers. Little wonder its politicians regard it as a success story.

There’s only one problem. The UK economy is built on an edifice of consumption and debt. The work we do? It’s selling things to each other that have been made abroad.

It’s a dangerously fragile situation, where we congratulate ourselves on maxing our credit cards out. This video explains where it all went wrong.

Robert Smithson

Robert tweets as ‘@MarketWarbles’


After a difficult week since the “deal” was published some welcome polling for TMay from YouGov

November 21st, 2018

This is as negative for the ERG gang as it is positive for the PM

On the front page of the Times  this morning there is a report on part of its latest YouGov poll relating to its TMay trackers asking whether and when she should go. Last week’s poll came just as the Brexit deal was being published and had the most negative numbers yet for the PM. In just a week as the chart above shows there’s been a major turnaround.

What’s particularly pleasing for Downing Street is that the party splits have supporters of all parties being more positive about the PM this week compared with last week with CON voters showing the biggest change. The latter wanting her to stay figures moved from 46% to 62% in this latest survey. LD voters moved from 40% to 56%.

These changes are well outside the margin of error and suggest that there has been a change in the way voters are viewing Mrs. May.

A week ago 43%  who voted Conservative in the 2017 general election said that they wanted her to stand down. Now that’s 27%.

There were reports over the weekend that many Tory MPs were finding more positive support for Mrs May in their constituencies than might have been apparent from the media coverage.

I wonder whether the reluctance of the PM’s staunchest critics in the parliamentary party to send confidence vote letters to Graham Brady has been because they detected a change in the public mood.


Mike  Smithson


The Adonis assertion that there’s going to be a second referendum fails to convince punters

November 20th, 2018

Mike Smithson


How the “deal” has impacted on the main UK political betting markets

November 20th, 2018

The biggest gamble’s been on TMay surviving the year

The money’s piled on an election next year


Raab soared in the TMay successor betting

All charts based on Betfair exchange prices by Betdata.io

Mike Smithson


If the ERG plotters get their 48 letters today and TMay loses the vote she’ll likely still be there at the end of the year

November 20th, 2018

At one stage in my career I used to advise Betfair on the precise market rules for its political markets. These are critically important because an exchange like Betfair stands in between those who are laying bets and those who are backing and needs to have something to fall back on should there be a disagreement. So anytime you want to make a political bet it is important for your own protection to check the market rules.

The currently heavy traded date of TMay’s exit Betfair market defines it in these simple terms  “When will Theresa May officially cease to be leader of the Conservative Party?”

So if she lost a confidence vote tomorrow my reading is that she would remain in post until such time as the process of selecting a new leader had been completed and there was a winner.

There is a relatively recent precedent – IDS in October/November 2003. He lost the confidence vote of CON MPs on October 29th 2003 but remained leader until November 6th when Michael Howard won the leadership unopposed. The differences between now and 15 years ago is that the CON leader is PM and it is highly likely that there will be a contest.

The first part of a contest, MPs voting to draw up the final shortlist of 2 to go to the membership could be truncated by having a number of MP ballots on the same day. The membership postal ballot would be much more difficult given that we are fast heading to Christmas.

Given the uncertainties of the post at this time of year it is hard to see how the packs could be produced mailed and party members given time to fill in their ballots and return them within the time that is available this side of the holiday.

It might be recalled that in 2007 Nick Clegg and Chris Huhne who fought it out for the Lib Dem leadership with a deadline for the return of ballot in mid December. There were reports that a sack of returned  packs had been held up in the mail and even though they arrived while the count was taking place they did not get there before the deadline and were ignored. That caused a lot of controversy particularly because Clegg’s winning margin was so small.

I would suggest that it would be extremely difficult for a Conservative leadership election ballot to be completed before the Christmas and they probably would leave it over to the New Year.

This is important for those betting in the TMay exit date market. If my reading is right those betting on her surviving until at least the New Year could well be winners already.

Mike Smithson


Taking stock. Brexit – just where are we and what are the options

November 19th, 2018

Christmas comes ever earlier each year. When I was a child, we didn’t hear anything about it until 1 December, when Radio 1 broke out the Christmas tracks. Contrast that with this year. Aldi launched their Christmas advert with Kevin the carrot on 9 November. John Lewis unveiled Elton John for their Christmas campaign on 15 November. And poor Theresa May was sledged on 16 November with Donner, Blitzen, Preener, Prancer, Stamper, Stomper, Comic, Stupid and Rudolf the Red-faced Reindeer all putting in their festive letters of no confidence.

What are the self-important ninnies in the ERG trying to achieve?  Let’s say that they get to the 48 letters that they require.  Let’s say that somehow they persuade sufficient numbers of MPs who did not think that the time is right for a contest that they should nevertheless change horses at this stage. 

Stretching still further, let’s assume that they get their chosen candidate (so far unidentified) into the last two and that the membership comes up trumps. What is it that they want the new Prime Minister to do?

For the new Prime Minister will still face the same constraints as the old one. The EU will still take the same negotiating approach and will not budge much. Indeed, they will be unlikely to negotiate at all unless they believe that whatever comes next will stick – the evidence for which is slight at present. 

Parliament will continue to have an absolute majority of MPs who supported Remain at the referendum and who will have the priorities of Remain voters but where a majority of MPs recognise the mandate of the referendum. The Conservative party will remain just as riven on the subject.

Remember, this is the best outcome for the ERGonauts. Far more likely results include advertising the skimpy numbers of true believers (as seems to have happened) or cementing Theresa May in office for another year. 

Replacing the Prime Minister is displacement activity. There are only really three options: fold, stick and twist. The problem that the government, the Conservative party, Parliament and the nation face is that choice has yet to be made by any of them on a collective basis and shows no sign of being made any time soon. 

The ERG should be focussing on that choice. Here they have a stronger hand, in the short term at least, if they want to twist. Other less extreme Leavers detest the draft withdrawal agreement. For that matter, some diehard Remainer Conservatives are opposed to it. The DUP are appalled by it. Labour are opposed to it. The SNP have never knowingly made a Conservative Prime Minister’s life easier. On a first vote at least, the withdrawal agreement at present looks doomed. 

That, however, would almost certainly not be the end of it. The idea that nothing will happen between a vote on the withdrawal agreement and 29 March 2019 looks fanciful. The next move would be the Prime Minister’s and while she would be in a tight spot, she has options.

She could resign. She could put the vote forward again – an option that has been touted on the basis that the markets would go haywire at this point. She could propose a referendum on her deal (probably vs Remain). Or, the draft having been rejected, she could propose a referendum on Remaining after all, as opposed to leaving the EU without a deal. Or, I suppose, she could do nothing. It’s easy to see the negatives of all these options. The bloody difficult woman would have a bloody difficult decision.

Whatever Theresa May chooses she is going to upset a lot of MPs. It’s hard to see how she would avoid a leadership challenge then. Still the question would remain, whether or not she saw that off: what should the Prime Minister do next? 

No policy option looks capable of keeping the Conservative party united. The Conservative party is getting close to ungovernable. Parliament as a whole looks as split. So Theresa May or her successor should look to form a policy that is most likely to keep the country together.

For all its many drawbacks (including one of timetabling), in those circumstances a fresh referendum might be the least bad option. If the country is to endure the privations of No Deal, it should be able to do so with a clear-eyed appreciation of what it is walking into. The decision should not be taken by default.

So perhaps the ERG should back the existing withdrawal agreement after all. It might well be their best outcome from here.

Alastair Meeks


Mr. Johnson becomes favourite once again to succeed Mrs. May

November 19th, 2018


But there’s no sign of an early contest

Thanks to BEM for the cartoon.

Mike Smithson


A big reason TMay is defying political gravity is because of the possible alternatives

November 19th, 2018

Last year my biggest political betting loss was on Theresa May not surviving. Like many others after her disappointing GE2017 outcome I was ready to write off her chances of staying at number 10.

Well 18 months on she is still there and I now approach the end of the year with completely the opposite betting position. My money is on the Prime Minister being the Prime Minister and Tory leader at the end of the year.

This is a market which as seen huge amount of turbulence in the last few days as the political world has digested the draft agreement on Brexit. At one stage on Friday Betfair had her as a 62% chance to be out this year. As I write this post that is now below 30% and could ease even further as we get closer to the year end.

    Whatever Moggsy and the ERG gang might hope I don’t think there is the stomach within the parliamentary Conservative Party for a leadership challenge at this crucial stage.

Even if 48 letters are received by Graham Brady then it still has to come to a vote and it is possible that the detractors would struggle to secure the support of 150 plus MPs which will be required for TMay to be ousted as CON leader.

The above ComRes/Sunday Express polling published yesterday highlights what is proving to be TMay’s firewall – the lack of a consensus amongst voters about a likely successor. All four names polled have big negative figures. If there is a confidence vote then many CON MPs are likely to be concerned that they could be providing the mechanism for someone they don’t want becoming leader and PM.

The other factor that I believe is constraining Tory MPs is that if there was a confidence vote this week that Mrs May won then she would be guaranteed to be able to stay in post free from confidence challenges until November 2019.

The argument for holding their fire until after Brexit in March next year is quite persuasive.

Mike Smithson