Financial Preview 18/02/2015: UK General Election 2015, Thursday 7th May 2015

With the election now only 77 days away, our updated Spreadex spreads are reflecting how tight this race has become.

The latest contradictory polls failed to elucidate the likely outcome in May. The first, an ICM poll conducted for The Guardian saw the Conservatives take a 4 point lead, with Labour on 32% compared to the Tories 36%, with Lib Dems at 10%, UKIP on 9%, and Greens at 7%. However, a poll by Lord Ashcroft saw Labour maintain a slim lead at 31% over the Tories at 30%, with UKIP growing to 16%, Lib Dems falling to 9%, and Greens at 8%. Given a basic margin of error would nearly wipe out the leads in both polls, the potential behaviour of the electorate remains murky for the time being.

However, there has still been plenty of fat to chew on, as Labour stood opposite a big fat gift horse and looked directly at its mouth. The tax evasion issues that arose from the current HSBC scandal continued to dominate the political discussion for the past 7 days, and Miliband appeared reengaged when discussing the issue. Yet Labour hasn’t gained as much ground as they should have. With it coming quick on the heels of the Stefano Pessina spat, the party were too eager to crucify the Tories, and failed to ensure that they themselves were water-tight before going after Conservative donors.



Even in instances where they gain some kind of moral high ground over the government, Labour has managed to mess it up. This is because the party’s weaknesses are largely to do with presentation and a failure to engage with the right targets. The staunch position on an EU referendum has done nothing to assuage those traditional Labour voters who may be considering UKIP, and the hurried focus on business and the economy has failed to counter the ‘safe pair of hands’ line the Tories are, effectively, trumpeting.

As former M&S CEO and current Ocado chairman Stuart Rose claimed the party isn’t engaging ‘sensibly’ in political debates, the perception surrounding the Two Eds as a pair of bumbling business-illiterates was not helped this week. Ed Balls and shadow business secretary Chuka Umunna got embroiled in discussing whether you should keep a receipt for every single cash-in-hand transaction regardless of size. With Balls stating he does and Umunna saying he didn’t, this minor issue was seized on by the press, obscuring actual Labour policies like its pledge to create 80,000 high quality internships in industry a year.

This is the latest move by Labour to appeal to a business industry that is incredibly wary of ‘Red Ed’. However Labour’s renewed focus on jobs and the economy after a misjudged attempt to create an NHS-focused election campaign failed may be too late. Today’s jobs data saw unemployment fall to a 6 year low, not far above pre-crisis levels; importantly three quarters of the new jobs created are full-time positions. At the same time, the Tories are benefiting from falling oil and food prices, neither of which is in their jurisdiction. This has helped them overcome the issue of real wage growth just in time for the election, allowing them to point at falling inflation and say ‘look at all this money we are putting in your pocket’. Sadly for Balls, the electorate don’t seem to be paying attention to his warning that the current situation is untenable.



So where does this leave us? Well, the Tories slipped on the General Election seats spread to 280-286 from 281-287, whilst Labour grew to 275-281 from 273-279. Given the opportunities presented to them, this gap should have been made even narrower by Labour, yet the fact that the Tories only slipped a point says it all. In terms of Most Seats fixed odds, the Tories suffered a nearly imperceptible increase to 8/13 from 4/6, whilst Labour fell from 11/10 to 5/4. There was no movement from the minor parties, beyond UKIP’s General Seats spread slipped to 5.5-7.5 from 6-8 in a week that saw them spoofed in a Channel 4 docu-drama as Labour aide Harriet Yeo defected to Farage and co.

With no clearer idea of who will be the winner come May 7th, remember to check back here at Spreadex next week for the latest election drama.