Westminster blog

Political gamblers appear to be unimpressed with Gordon Brown. They believe the likelihood of the prime minister winning the most seats at the next election has never been lower — in spite of improved Labour polls, a makeover at Downing Street, a budget and an apparent conversion to Blairite reform.

Take a look at this graph showing the odds on Labour winning the most seats at the next general election. The data is from Betfair, the online betting exchange (think of a stock market rather than a bookie offering odds), covering a period of about three years in a market worth about £600,000.

Here is a quick run through of the Labour peaks and troughs since 2005. After the 2005 election victory, the betting market settled on there being a 65 per cent chance they would win the most seats at the next election.

This fell to under 40 per cent at the height of Tony Blair’s unpopularity.

Labour’s prospects steadily improved after he announced he would leave in a year, rising to 60 per cent as Mr Brown became prime minister. His honeymoon and the snap-election speculation pushed his chances of winning the most seats to a remarkable 75 per cent.

This plummeted back towards 40 per cent after the non-election, the data loss and the donations scandal.

What is interesting is that this has stayed about the same since the end of last year. The great relaunch has apparently had no effect on the opinions of those gambling on his prospects.

So what are the punters telling us?

First, that Mr Brown is caught in a rut. He has more chance of beating David Cameron than Tony Blair at his most unpopular. But not much more.

Second, that the Tories have hit a ceiling (see the graph on the left showing the Tory chances of winning the most seats). There is about a 55 per cent chance that the Tories will win the most seats. But they had a better chance of beating Tony Blair.

In sum, we have hit a political impasse. Very little seems to move the odds. Tracking how punters are wagering their money is a good alternative to watching political polls, as it offers a longer term perspective, rather than a snapshot of opinion.

The lesson is that while the polls are moving towards Labour, the betting man still thinks the Tories will prevail.