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Bob Mason

As the UK political parties enter the 3rd week of campaigning, the opinion polls and bookmakers continue to point to a Tory victory.

Holding onto the current share of the vote as Election Day approaches may be another story, however.

The UK Election Predictions

While the YouGov opinion polls continue to give the Tories a comfortable lead, the Electoral Calculus, which estimates the number of seats each party would win, painted a different picture.

At the time of writing, the model showed that the Tories are projected to win 350 seats, which would give a 50 seat majority.

The projections are based on opinion polls taken between 6th and 12th November.

For the Tories, the lead has narrowed considerably. In response to the Brexit Party’s support for the Tories last Monday, the Electoral Calculus had projected the Tories to win 382 seats last Wednesday. 382 seats would give the Tories a comfortable 112 seat majority.

The Tories had been projected to win 370 seats, with a 90 seat majority, before Farage’s announcement last Monday.

While the majority has fallen, the projected number of seats remains comfortably higher than the 318 seats won in the 2017 General Election.

For the Labour Party, it continues to be grim reading if the projections are anything to go by. The opposition party is set to win 213 seats. That would be down from 262 seats won in the 2017 General Election.

There was a jump in support for the Labour Party as the week progressed, however. Electoral Calculus had projected the opposition party to win just 186 seats mid-way through last week.


Hung Parliament

Interestingly, while the Conservatives saw the majority number of seats fall in the week, the odds of a hung parliament remained largely unchanged.

According to Oddschecker, the odds for the Tories to win with an overall majority stood at 4/7, while the odds of winning the most seats stood at 1/16.

In the 1st week of November, the Tories were odds on favorite to win with a majority.

For the opposition party, the odds of winning the most seats stood at 12/1. The odds of winning with an overall Labour majority was an even longer 35/1. Two weeks ago, the odds of the Labour Party winning the most seats had stood at 20/1. (According to UK bookmakers)

The pickup in support for Labour should have also raised the chances of a hung parliament. A poor showing for the Lib Dems early on in the campaign may have influenced the numbers…

At the time of writing, Oddschecker had the odds of a hung parliament sitting at 7/4. UK bookmakers had the odds of a hung parliament at 5/4 in the 1st week of November.

The Pound

Last week, the Pound rose by 0.96% to close out the week at $1.2897.

The upside came in spite of quite dire economic data out of the UK. The numbers suggested that the BoE may need to consider a rate cut sooner rather than later.

Support for the Pound continued to come from expectations of a Tory Party majority victory.

With Electoral Calculus predicting a lower majority, expect the weekend polls to have a material impact on the Pound at the start of the week.

The markets will likely be more responsive to the YouGov polls once updated from the weekend polls.

One thing is certain, the Pound will become more sensitive to the projections and the opinion polls. There are less than 4-weeks to go until Election Day.

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