Labour has seen a step change in their chances of leading the next government in the past four days, a point brought home in the chart (click for a larger view).In the days following iPredict's launch in early September, Labour's chances of leading the next government hovered around the 25% mark. Towards the end of September, a downwards trend in this market began with Labour sinking to the low 20's by the end of last week.
And then there was the Morgan Poll on 10 October, which produced a surprisingly narrow gap of 3% between National and Labour. This was followed up later on Friday by the release of a TV3 poll also showing a narrowing gap between Labour and National.
This shocked the market and the result was a step change up for Labour by 6% - a significant change give Labour's relatively low starting point. And there is some indication of an additional upwards movements in Labour's re-election prospects since Friday, which may be a product of two major announcements, the first that the government will insure bank deposits, and the second being Labour's universal student allowances policy in kick in four years from now.
This upwards trend in Labour's chances of leading the next government has of course been mirrored by a decline in National's chances. National is now down to $0.69, not its lowest level since iPredict launched but close to it.
What is striking is how little other recent events have moved Labour's election prospects. The global financial meltdown, the release of National's tax policy last week, and the disclosure that the government is looking at 10 years of budget deficits did not move traders on iPredict - producing at most a gradual downwards movement in re-election chances.
The current momentum is with Labour, it will be interesting to see what National does reply and whether that response is enough to convince traders.
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