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No Clear Front Runner For Next Conservative Leader In Betting Markets


As political speculation continues as to the future longevity of Prime Minister Boris Johnson's tenure, some market focus will have to remain on who is favourite to take over at No.10, given the prospect of Johnson's resignation or a change in the party's rules that allows another leadership contest.

  • PM Johnson has PMQs at the top of the hour. Link here:
  • Betting markets show no clear frontrunner to be the next Conservative leader and PM. Former Foreign Secretary and the final opponent of Johnson in the 2019 leadership contest Jeremy Hunt is the favourite, but a 17.9% implied probability of winning shows how broad the field is.
  • Indeed, according to data from Smarkets there are seven potential candidates with an implied probability of winning of 5% or higher (a one-in-twenty chance).
  • A change in leadership would not result in a change in the party of gov't. However, it could lead to a notable change in gov't policy. The Johnson gov't has received significant criticism from some of its own MPs about its inclination to raise taxes, which some see as an un-Conservative policy. A new leader from the right of the party, such as Foreign Secretary Liz Truss, could come to office as a tax-cutting Thatcherite figure.
  • However, a more centrist figure such as Hunt could be more inclined to seek to balance the gov'ts books amidst inflationary and low growth pressures by maintaining Johnson's tax hikes combined with public sector cutbacks or departmental budget freezes.
Chart 1. Betting Market Implied Probability of Becoming Next Conservative Leader, %

Source: Smarkets

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