Introducing PB’s new election “predictor”
In the run-up to the 2005 General Election PB first started trying to produce a regular prediction of the likely outcome based on taking the average of opinion on the spread-betting commons seats markets. These are betting arenas where gamblers can be risking large amounts of cash “buying and selling” commons seats.
The seat spreads that you see every day are a reflection of where the cash is going – hence the terms “Balance of Money” to describe it.
There will be 650 MPs in the next parliament so a total of 325 is required to form a majority. So with an average spread level for the Tories this morning of 338 seats that translates into a majority of 26.
Looking back to 2005 our first predicted outcome seven weeks before polling day pointed to a Labour majority of 57 seats which was just five seats short of what actually happened – not bad.
As we got closer to the election opinion hardened behind Labour and the final average just before the polls opened on May 5th 2005 was for a Labour majority of 94 seats. This was nearer to the final outcome than the opinion polls. Martin Baxter’s Electoral Calculus calculation, based on his poll of polls, was for a Labour majority of 134 seats.
So the plan is to repeat the exercise again in what is being termed the “PB Balance of Money Index”. This is computed by taking the mid-points in the spreads from the three main markets – Sporting Index, IG Index and Spreadfair – and then calculating an average.
My aim is that this will become a regular feature and I will return to it at least once a week. In the election campaign proper there’ll be a new index at least every day.