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PM Sunak Faces Test Of Authority In Rwanda Bill Vote


Prime Minister Rishi Sunak is facing a significant backbench rebellion from the right of his governing Conservative party in a parliamentary vote that could test his authority as leader. The issue surrounds legislation related to the proposed deportation of some asylum seekers to Rwanda. The legislation itself is not market-moving, but the impact of the vote on the stability of the UK gov't and the potential date of the next general election could have a broader impact. The vote is expected later on the evening of 12 Dec.

  • A Supreme Court ruling in November judged the gov'ts immigration plans to be in breach of UK law, resulting in new legislation being proposed. This legislation could be opposed by a number of right-wing Conservative factions what say is does not go far enough in ensuring deportation flights to Rwanda will take place and small boat crossings of the English Channel are stopped. The largest faction, the ERG, is set to meet at 1700GMT to discuss the legislation.
  • On the evening of 11 Dec, the moderate One Nation Conservatives grouping signaled its, albeit reluctant, support for the bill, removing one potentially hazardous obstacle for Sunak.
  • A defeat for the gov't could embolden challengers on the right to seek to depose Sunak ahead of the next general election.
  • Political betting markets continue to have Q424 as the most likely time for the next election, with a 54.4% implied probability. Q224 comes in second with a 23.8% chance, with the remaining options (Q124, Q324, and January 2025) all around the 8% implied probability mark.
Chart 1. Betting Market Implied Probability of Date of Next General Election by Quarter, %

Source: Smarkets

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