The General Election 5 days out

Posted on 3 June 2017 by Ray Boulger

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Below is an interesting chart, first published by politicalbetting.com, based on the latest poll from each pollster, as of today, and reflecting the much wider divergence than normal between pollsters. 

How the Tory lead has shrunk since the start of the campaign

Pollster

Largest Tory Lead during the campaign

Current Tory Lead

Reduction in Tory lead

ComRes

25

12

13

ICM

22

12

10

Ipsos MORI

23

5

18

Kantar

24

12

12

Opinium

19

10

9

ORB

15

6

9

Panelbase

22

8

14

Survation

17

6

11

YouGov

24

3

21

While all the pollsters show the same trend since the start of the campaign the variation in the current Tory lead of between 3% and 12% is much larger than usual. One of the reasons for this is that different pollsters are making different assumptions about the proportion of younger people who will vote. As the 18-25 age group vote goes disproportionately to Labour (and Green, although the Green vote is small enough to be irrelevant in this context) if one assumes a higher than normal proportion of that age group will vote it results in a smaller Tory lead.

I think after last night’s debate, where, in my opinion, and for the first time in this campaign, Teresa May exceeded expectations, partly because they pretty low, and didn’t drop any balls, whereas Jeremy Corbyn’s response to the nuclear weapon question in particular was a gift to the Tories, the trend in the polls will now at least be stemmed, and probably reversed.

I think the question is still the same as when the election was called, i.e., not who will win but what the size of the Tory majority will be. Whilst a hung parliament is now an outside possibility, as is the possibility of a Tory 3 figure majority, I think the Tory majority will be around 50 - 70 seats, with quite a few of the gains resulting from an increase in Scotland from the single seat they currently hold there.

If the result is in this ballpark, or even if there is a smaller, but adequate, Tory majority, sterling will improve as market nervousness about the risk of a hung Parliament is dispelled. As gilt yields haven’t moved much since the election was called a result broadly in line with the above forecast is unlikely to induce a significant movement either way and hence the cost of fixed rate mortgages is also unlikely to change much.

However, one excuse for delaying a house move will disappear after the election and so activity in the housing market should pick up after the recent slowdown. This was evidenced only this week by the large fall in mortgage approvals reported by the Bank of England for April, which reported house purchase approvals falling to 62,404, compared to 79,525 in March and 71,866 in April last year, i.e. a fall of 21.5% from March and a fall of 9.6% from April last year.

With the lag between mortgage approvals and completions, a fall on this scale in approval numbers doesn’t bode well for the CML’s May purchase figures, although the fall in the value of mortgage approvals was slightly less at 20.0%. 

The approval numbers were consistent with the sharp month on month fall in April housing transactions reported by HMRC, which at 83,010 compared to 107,090 in March, a fall of 22.5%. However, this was 12.8% higher than the April 2016 number of 73,570, although of course last year’s numbers were distorted by the rush to complete before the 1 April 3% stamp duty surcharge.

Categories: Miscellaneous

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