Nice summary of the Unicredit analysis.
Why May Should 'Win Big' and Implications for British Pound v Euro and US Dollar
Polls are tight but UniCredit have set out six reasons as to why they expect the Conservative party to increase their majority:
1) Historically the approval rating of the leader has proved to be a very good predictor of election results. One pollster, Ipsos Mori, started polling on leadership approval as far back as 1979 and in every general election since then the party with the most popular leader won.
Theresa May, in contrast, has a high approval rating and, while it will concern the Conservatives that her rating has fallen steeply in recent weeks, it is still significantly higher than that of Jeremy Corbyn.
2) Jeremy Corbyn has moved the Labour party further to the left-wing of politics. For example, the party manifesto includes plans for the nationalization of energy companies, railways, buses and the Royal Mail. Previous elections where Labour shifted strongly to the left, notably Michael Foot in 1983 and, to a lesser extent, Ed Miliband in 2010, resulted in big defeats.
3) UKIP’s job is done meaning the party’s 12.6% of the vote share garnered in 2015 is potentially up for grabs. The extent to which those lost votes go to the Conservatives will matter.
“There’s no doubt that the vast majority of ex-UKIP voters are going to the Conservatives,” says Matthew Goodwin, professor of politics at Kent University. “Between 40 and 60 percent of ex-UKIP voters are going to the Conservatives. The highest number we’ve seen going to Labour was 20 percent.”
4) The Labour Party performed poorly in local elections and lost seats in Brexit-voting Labour heartlands. This tells us something that polls cannot.
5) The UK economy remains resilient and grows at a steady pace. Governments are often voted out when the economy is performing poorly.
6) The Liberal Democrats have failed to capitalise on their pro-EU stance. The party was hoping to hoover up the support of many remain voters.
Risks to the Call
UniCredit admit there are risks to their call.
One of these is that Theresa May’s decline in personal ratings are on a terminal path. It’s hard to tell how May has weathered the London Bridge terrorist attack.
While some have seen a positive performance it has opened up questions about her overseeing cuts to the numbers of police officers while at the Home Office.
A second risk is that young voters turn out in large numbers. The younger vote is notoriously less-assured than the pensioner vote which presents the Conservatives with an advantage.
A total of 1.05 million 18-24 year olds since Theresa May called the snap general election on 18 April.
"Younger voters are much more likely to vote Labour than Conservative, but they are also much less likely to turnout to vote. Therefore, turnout will be key in this election and, if high, it might suggest Theresa’s May’s gamble has not paid off,” says Vernazza.
1) Historically the approval rating of the leader has proved to be a very good predictor of election results. One pollster, Ipsos Mori, started polling on leadership approval as far back as 1979 and in every general election since then the party with the most popular leader won.
Theresa May, in contrast, has a high approval rating and, while it will concern the Conservatives that her rating has fallen steeply in recent weeks, it is still significantly higher than that of Jeremy Corbyn.
2) Jeremy Corbyn has moved the Labour party further to the left-wing of politics. For example, the party manifesto includes plans for the nationalization of energy companies, railways, buses and the Royal Mail. Previous elections where Labour shifted strongly to the left, notably Michael Foot in 1983 and, to a lesser extent, Ed Miliband in 2010, resulted in big defeats.
3) UKIP’s job is done meaning the party’s 12.6% of the vote share garnered in 2015 is potentially up for grabs. The extent to which those lost votes go to the Conservatives will matter.
“There’s no doubt that the vast majority of ex-UKIP voters are going to the Conservatives,” says Matthew Goodwin, professor of politics at Kent University. “Between 40 and 60 percent of ex-UKIP voters are going to the Conservatives. The highest number we’ve seen going to Labour was 20 percent.”
4) The Labour Party performed poorly in local elections and lost seats in Brexit-voting Labour heartlands. This tells us something that polls cannot.
5) The UK economy remains resilient and grows at a steady pace. Governments are often voted out when the economy is performing poorly.
6) The Liberal Democrats have failed to capitalise on their pro-EU stance. The party was hoping to hoover up the support of many remain voters.
Risks to the Call
UniCredit admit there are risks to their call.
One of these is that Theresa May’s decline in personal ratings are on a terminal path. It’s hard to tell how May has weathered the London Bridge terrorist attack.
While some have seen a positive performance it has opened up questions about her overseeing cuts to the numbers of police officers while at the Home Office.
A second risk is that young voters turn out in large numbers. The younger vote is notoriously less-assured than the pensioner vote which presents the Conservatives with an advantage.
A total of 1.05 million 18-24 year olds since Theresa May called the snap general election on 18 April.
"Younger voters are much more likely to vote Labour than Conservative, but they are also much less likely to turnout to vote. Therefore, turnout will be key in this election and, if high, it might suggest Theresa’s May’s gamble has not paid off,” says Vernazza.
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