Will Gord get thanked for all the bargains?

If there’s one place where the recession will be most apparent in the coming months it’s going to be the High Street. Yesterday one major retail chain changed hands for just £1 and others are reported to be struggling particularly in the non-essentials sector of the market.

Tomorrow I expect to be buying a new computer and my first thought was to go to a big national chain where there are some impressive bargains. But then I read that the firm’s holding company had seen a dramatic drop in its share prices and there are question marks about its future. I will now probably go to John Lewis instead. So my decision will add to the other firm’s problems.

Everybody’s talking about prices being slashed and there’s little doubt that shoppers who have the money are going to have a good time in the coming months - but what’s going to be the political reaction?

Will people thank Gordon for the low prices or will the mass of sales be an ongoing reminder that something is wrong with the economy?

This is all a hard call and a lot might depend on how Monday’s PBR statement by the chancellor goes down.

Mike Smithson

Will opinion harden behind Gord or Dave?

On the thread the other day the question was posed as to whether in the build up to any other general election had there been so many turns.

My recall is that while there have been shock results, most notably 1970 and 1992, we haven’t quite had the twists that we have seen in the period from May 2005.

It’s perhaps worth repeating that on only one occasion since 1945 has a party with a workable majority at Westminster been replaced by another party with a workable majority. That was at the shock election of 1970 when Edward Heath’s Tories ousted Harold Wilson’s Labour.

At all other elections when there has been a change of government the outgoing party had lost a workable majority (1951, 1979 and 1997) or the incoming party did not get enough seats and another election followed soon afterwards (1964 and February 1974). It’s also worth noting that elections leading to hung parliaments are a rarity and since the war this has happened only once - February 1974.

I think that in the run-up to the election opinion will harden up behind either Labour or the Tories and one of the parties will be returned with a working majority. Until the last few weeks I thought it would be a clear-cut Tory victory - now I’m not so certain though I do believe that the outcome will be decisive.

The electoral mathematics mean that Labour could hang on to a majority even if they are behind the Tories on votes.

In terms of the “overall majority” betting the value bet seems to be that 5/1 on Labour. If the hung parliament price gets much tighter than that might be worth a lay on Betfair.

Like all these things this is not a prediction - but an assessment by me of where I think the betting value lies.

Mike Smithson

Do we expect further moves to Labour?

As expected the latest Ipsos-MORI poll putting Labour just 3% behind has caused movement on the spread betting markets - the political betting arenas where you can win or lose whole piles of cash by trading the number of seats the parties will get at the general elecxtion as though they were stocks and shares.

The latest spreads from from PB’s co-sponsor, Sporting Index are: CON 334-340: LAB 242-248: LD 42-45 seats.

With IG Index it’s CON 332-338: LAB 244-250: LD 43-46 seats. On the Spreadfair spread-betting exchange the mid-points are CON 336: LAB 250: LD 43.

So the average mid-points suggests a Tory majority of 20-22.

Everything seems to depend now on the public reaction to next Monday’s pre-budget report from the chancellor. If the proposals here are popular you could see further movement on the markets.

My betting: I remain a Labour buyer and my positions have moved so that the level I bought at is now below the level I can sell - so I could cash in and pocket a profit today. I’ve now also sold the SNP at 10 seats. Salmond’s party is going to struggle to hold onto the seven seats they currently hold.

Mike Smithson

Is the Mirror’s Maguire right - Cameron panicked?

The big political shift in the past 24 hours has been the abandonment by the Tories of their commitment to match Labour spending plans and, instead, start talking about tax cuts.

This is Kevin Maguire’s take on it on the Mirror website: “..Every nurse, teacher, care worker, soldier and their families now has a vested interested in voting Labour at the General Election. No wonder the Prime Minister’s struggling to keep a straight face in his Downing Street bunker..Brown’s enemies have played into his hands, walking into a trap, exposing political bankruptcy in an economic crisis. These days it’s the Tory leader who should be hoping for a second chance..Because Cameron and Shadowy Chancellor George Osborne have screwed up royally”

We saw a touch of the political battle ahead at today’s PMQs with Cameron reiterating his warning that tax cuts now would lead to future tax rises. He asked: “Taxes will have to rise; isn’t that true?”.

The government’s main argument seems to be that nations round the world are following this approach - so why not the UK?

A challenge for Brown is that it is repeatedly going to be put to him that his strategy will inevitably lead to tax increases in the future - something that he refuses to answer and he could start to sound as though he is being evasive. Refusing to answer questions is a powerful charge that can be developed by the opposition.

Mike Smithson