Global Economic
Trend Analysis

Recent Posts

Thursday, May 07, 2015 2:15 AM

UK National Elections Underway: Expected Outcome is Hung Parliament

Mish Moved to MishTalk.Com Click to Visit.

I frequently comment on major elections, but here we are with voting for UK prime minister now in progress, and I have not chimed in yet.

Unlike in Greece where I was confident Syriza would poll better than expected (and it did), I have no particular feeling of confidence on what is likely to be a a very important election.

Voting Booths are just now open as of 1:00AM US central where I reside.

Here are the Final Polls.

Note that UKIP is in third place. How do you think that will translate into parliamentary representation?

Here is a Final Projection from the Financial Times.

Note the apparent silliness of it all. What matters is how concentrated the votes are, not how many you get. On a guess the revolt vote is underestimated, I am going to go out on a limb and suggest UKIP will win 7-10 seats.

Hung Parliament

The most likely outcome is there will not be a winner. The Guardian reports General election 2015: Britain heading for hung parliament.

When the Guardian’s poll projection, an average of all the polls made public, is updated to take account of the new ICM data, it places both the Conservatives and Labour on 273 seats – neither anywhere near the 326 required for an absolute majority.

But the huge anti-Tory SNP bloc of 52 gives Miliband the stronger position in the battle to negotiate for control of No 10. The cabinet secretary, Sir Jeremy Heywood, is on hand to prepare for talks, but will not press Cameron to leave Downing Streeet, since it will be his right as prime minister to decide whether to test the opinion of the Commons on a Queen’s Speech.

ICM pressed voters on the government they would prefer. The single most popular choice – picked by 25% – was a Conservative overall majority, followed by a Labour majority, which 23% preferred.

A Conservative-led administration in which the Tories have to strike deals with others is the choice of 22%, while a Labour-led government that had to strike deals was picked by only 19%, a possible sign of success for the Conservative warnings about a SNP-backed “coalition of chaos” installing Miliband in Downing Street.

The public also envisages the Lib Dems outperforming most polls by achieving 14%, and Ukip underperforming somewhat, with 10%.
Elusive Outcome

If this sounds confusing, it is because it is confusing. Bloomberg highlights the issues in U.K. Votes in Unprecedented Election With Outcome Elusive.
Polls suggest that neither Conservative Prime Minister David Cameron nor his Labour opponent Ed Miliband will come close to getting enough seats in Parliament to govern alone. Instead, they face days or even weeks of talks to try to win over enough smaller parties to command a majority.

The uncertainty attached to the electoral outcome in a Group of Seven nation is beginning to play out in markets, with volatility buffeting the pound and gilts. One reason is the political risks even once a government is formed: If Cameron manages to stay in office, he’ll hold a referendum on leaving the European Union. If Miliband gets in, it will be with the support of the Scottish National Party, which will be looking for opportunities to further the cause of independence.

While the Labour and Tory campaigns have failed to inspire the electorate -- the polls have stubbornly refused to budge since the beginning of the year -- other parties have engaged voters who have been sidelined for decades. The SNP looks set to win at least six times as many seats as it took in 2010. At the other end of the country, the anti-EU U.K. Independence Party may win seats for the first time at a general election.

Rich First

Miliband has returned repeatedly to the future of the state-funded National Health Service as a campaign theme, arguing that the Tories are bent on its privatization. He’s accused Cameron of pursuing policies that only favor the rich.

“I’m not simply asking you to reject the Conservatives but to reject their plan to put the rich and powerful first,” Miliband told a rally in northwest England on Wednesday. “I’m asking you to reject a plan to double the cuts next year and devastate our NHS. I’m asking you to reject a plan for a recovery that only reaches the City of London.”

Red Lines

Clegg has set out six “red lines” that he’ll demand as the price of joining a new coalition, including higher education and health spending and pay increases for public-sector workers. Cameron has made it clear that the holding of an EU referendum represents his own red line. Clegg has not ruled out accepting that demand.

Arithmetic suggests Labour and the SNP may have enough seats together for a majority. While Miliband said last week he’d rather not be prime minister than do a deal with SNP leader Sturgeon, he doesn’t need to. If the numbers add up, Miliband could form a minority government, safe in the knowledge that the SNP has pledged to support it in any confidence vote and oppose a Tory-led administration. He also has the option to do a deal with the Liberal Democrats
Still Confused?

I thought so. This is one of the most complicated elections ever.

I have no love of David Cameron. Yet I am rooting for him because of his promised up-down vote on the UK remaining in the EU. Although there is no reason to believe Cameron will keep his word, there will not be a vote for certain if Labour wins.

Such is the sorry state of politics. How about a vote for "none of the above"?

Mike "Mish" Shedlock

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats