UK Politics

Next General Election Date: Is Rishi Sunak about to call the election?

UK Prime Minister Rishi Sunak
Rishi Sunak is facing further electoral disaster

Speculation is rife that Rishi Sunak will announce the election date either before or straight after this week's elections? Is there anything to it? Read Paul Krishnamurty's analysis...

  • July odds have fallen sharply

  • Local election defeat could spark challenge

  • Is this a plan to thwart the rebels?

This is a big electoral week in the UK, with voters going to the polls on Thursday to determine various mayoral contests and council seats. The last few days, however, have seen rampant speculation about the big one. Money has been pouring in for the General Election Date to be either June or July.

Both of those months - and the tri-monthly bands of which they are part - have been matched around 8.07/1 although June has since fallen back to 16.015/1. Those odds are less than a third of their peak. Oct-Dec, remains the favourite band at 1.321/3, but those odds have lengthened somewhat amidst the speculation.

I believe this tweet from Nadine Dorries really kicked the speculation into gear on Thursday. Others reported the speculation, which was quickly countered.

Then yesterday when asked repeatedly to rule out a July election, Rishi Sunak refused.

Many others have pointed out what a bizarre move it would be. Not only are the Tories 20% down in the polls, but if they go now, they won't receive any of the benefit they hope will materialise when interest rates fall, and inflation falls further.

Are there benefits to Sunak going early?

I concur with all of that but, let's play devil's advocate. If he were to call it today, then it might theoretically get the Tory base into election mode in time to save a few councillors on Thursday. However, given it is expected to be a terrible night for the Tories, this would represent just about as bad a start to an election campaign as one could imagine.

It would, however, coincide with voters receiving the cuts to National Insurance and rise in the state pension. I certainly wouldn't underestimate the latter helping win back some 2019 defecters or don't knows.

The longer they wait, the more 2019 Tory voters will die and be replaced by first-time voters. Fewer mortgage holders would see their rates rise. These are solid facts to consider but, given we are talking about the difference of a few months, the numbers are marginal.

Avoiding US election clash makes sense

Going early would also mean avoiding clashing with the US election - in which democracy itself will be on the ballot, and could very well turn violent. Given many senior Tories and a large percentage of their voters will be supporting Trump, even as he refuses to accept the result again or calm his violent supporters - that is another solid reason to avoid an autumn election.

So there would be some logic, albeit not of the conventional kind, to support an early election. If there is any truth to it though, the explanation far likelier revolves around the perennial psychodrama within the Conservative Party itself.

Sunak's survival is the key determinant

This is the week which, for months, many of us have expected a leadership challenge to gather steam. In polling and electoral terms, Sunak has been a dismal failure. This next round of humiliating defeats, could be the catalyst for moves to replace him, in the hope the new leader gets a honeymoon with voters.

There has been activity behind the scenes, played out via client media, about which we can only read between the lines. The Sun reported that 1922 Committee chair Sir Graham Brady explicitly warned Sunak against calling an early election. Clearly at the very least, the idea was doing the rounds.

This was, I assume, in fear of Sunak would call the election to blindside his internal enemies and avoid a confidence vote. That remains a possibility but also, just allowing speculation to run rampant might have the effect of deterring the plotters.

I can't overstate how outside the norm of politics this is. The machinations, factionalism, spinning among Tories and their media has been unprecedented during this Parliament. We should take anything from Tory-connected media on these matters with a pinch of salt, and read between the lines.

Sunak exit markets to spike again?

Consequently, what was always going to be a big week for political betting takes on extra significance. My main focus remains on the actual elections that are definitely taking place, and will provide some more tips and bets on Wednesday.

But at the same time, we must keep one eye on the range of potentially volatile markets around both the election date and Sunak's future. In particular Sunak to face Confidence Vote, Sunak to be Leader at Next Election and Next Prime Minister. The odds about the status quo in the first two are around 1.282/7 and 1.222/9 respectively, and Keir Starmer is 1.222/9 for the last one.

So it's around a 9/2 chance that Sunak is removed. That still feels a fairly cheap risk, given the potential for market chaos and drama in Westminster as results come in on Friday. If you fancy it happening, then laying Starmer is the best bet as there would still be an option to cut the loss if the election is effectively between him and Sunak.

What might Sunak supporters regard as a good enough night to stave off the rebels? Well they are briefing the results I talked up last week - retaining the mayoralties in West Midlands and Tees Valley. That's an extremely low bar, which probably wouldn't convince critics, and neither is anything like a certainty. Buckle up.

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