Bettors Shift Towards PM Remaining In Office Until 2024 Or Later

Political betting markets have shifted back in favour of Prime Minister Boris Johnson's tenure lasting until the next general election or later, as the Metropolitan Police announces the conclusion of its investigation into COVID-19 rule breaking at Downing St. and Whitehall.

• The incidents, known as 'partygate', were seen to have contributed to a sharp increase in betting on the PM being forced from or leaving office in 2022 (reaching a high implied probability of 48% on 25 April). The Met today announced that 126 fixed-penalty notices have been handed out in Downing St./Whitehall due to rule-breaking at eight events. No confirmation whether Johnson has recieved a second FPN.
• The shift in Johnson's favour comes despite a poor set of local election results for his Conservative party, rising inflationary pressures on households, and scandals involving Conservative MPs. The implied probability of the PM remaining in office until 2024 or later stands at 49.5%, up from a recent low of 39.7% on 28 April. The implied probability of Johnson leaving office in 2022 has fallen to 29.4%, with a 20.8% implied probability that he leaves in 2023.
• Should Johnson resign/be forced out the UK could be in for a period of notable political instability at a time of economic challenge. There is no clear successor to Johnson, with previous frontrunner, Chancellor Rishi Sunak, seen as out of the running.
• A divisive leadership campaign amid rising inflation, the war in Ukraine, and returning Brexit issues could damage the party's standing further with the electorate, increasing the chances of a Labour gov't coming to power in 2024.

Source: Smarkets