The monthly ComRes poll for the Independent is out tonight. Topline figures are CON 34%(+4), LAB 37%(+1), LDEM 10%(nc), UKIP 12%(-2). The three point Labour lead is the lowest ComRes have shown since last September, and the 34% for the Conservatives the highest since last November.

The drop in the Labour lead and the fading of UKIP support is very much in line with the pattern we’ve seen in the daily YouGov polls, in ICM’s poll this month and in line with the sort of figures Populus are now showing… though it’s worth noting that MORI and some of the new online companies aren’t yet picking up the same pattern.

As to why the polls are narrowing, the harsh truth is that we really can’t tell. There is always a temptation that I see people falling into to reach for the issue you personally care about and ascribing changes in the polls to that (or “why the change in the polls shows that politicians should do the thing I like”) the reality is we can’t tell*, all we can do is look for rough correlations in timing. Personally my best guess is that’s its the result of the ongoing improvement in economic optimism we have seen over the past few months, a rather more controlled Conservative message and the decreased level of publicity UKIP have been receiving.

(*Whenever I make a point like this someone makes the suggestion of asking people. Oh were it so easy! Firstly, if you ask people who gave a different answer 3 or 4 months ago if they’ve changed their mind many won’t realise they have. If you ask why to those who have consciously changed their mind you get lots of don’t knows, general grumbles and some reasons that may be genuine causes, or may be post-hoc rationalisations for complex decisions we probably don’t even understand ourselves.)


424 Responses to “ComRes/Indy – CON 34, LAB 37, LD 10, UKIP 12”

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  1. Okay. I’ll make the Tory case.

    Governments tend to change when the electorate feel pushed into it. 1979, 1997, 2010. Otherwise, if things are trundling along okay economically, the Government tends to get re-elected, albeit without enthusiasm. Look at 1992.

    So come 2015, why take a risk on EM when things don’t need changing?

    The counter argument to this is that the Tories are not the Government, they are in colation and won’t improve upon 2010.

    But it might be that Lab won’t get the vote because most of their would-be voters won’t care enough to bother.

  2. Morning Nick.
    Itaque a hung parliament seems likely, I think.

  3. @NickP @CL1945

    Except, of course, that people don’t get a vote for (or against) a government even in the best situations – they vote for an MP. In this case it will be even less usual in that the Government will not be standing any candidates, no one will be able to vote for the Coalition!

    If people had a choice then I think that there would be a large majority who did not want a coalition after the election, most Tory and Labour voters for a start. However it isn’t clear how this will practically translate into votes, other than a possible loss for the LibDems, which also has other causes…

  4. A welcome piece in The Times today by Camila Batmanghelidjh.

    To read someone with her credentials & knowledge ,analysing the murder of Daniel Pelka & the role of child protection agencies, counters the feeling in the pit of the stomach engendered by another headline.:-

    The prison & criminal record of the man who persuaded the child protection agencies that the young boy he was starving & abusing, and would go on to murder, had a genetic condition which made him hungry.

    CAmila B concludes ” our child protection and child mental health system is not fit for purpose” and urges the enquiry to address the issues she raises. Let’s hope they do.

    All power too, to Geoffrey Robinson MP.

  5. The Labour VI is pretty solid.

    What can reduce it ?

  6. Interesting point in the cycle. The economic news from all over appears much better now, but I don’t expect we’ll hear Osborne agree that the improved UK performance is only due to global conditions. This applies when things are bad, but not when they are good. One of those funny rules of government we see from time to time.

    A number of commentators are suggesting that the UK figures are so good that we are about to reach escape velocity, while others bemoan the fact that consumer debts are rising from very high levels already to pay for the increased spending – hardly a sustainable condition.

    If this rate of growth persists until 2015, and it looks likely that it will in the short term at least, then we really could be in the surprise position of Tories competing for a majority. I think this still remains a less likely scenario, but the odds have shifted slightly. They have been aided by what is increasingly becoming a lacklustre performance by Labour.

    I’m not a long time critic of Ed M, and unlike a lot of other stuff you read, I understand that the art of opposition is extremely difficult – much more so than government, politically at least. Ed has floated some very good ideas, and seen them hijacked by Cameron (as always happens to oppositions) and the altered economic circumstances demonstrate the old adage about waiting until you see the circumstances at the next election before your state your policies.

    But there is no question policies will be needed. I still feel it’s too early for Labour to announce detailed policies, but in the meantime they need to be filling the gap with energetic campaigning and general mood tuning. This either isn’t happening, or isn’t being reported, so either way they need to sharpen up their act.

    I don’t believe Ed thinks all he needs to do is sit back and let Tories lose the next election, but he is approaching the point where he needs to lead his party.

  7. ALEC

    THanks

    Yes-still cautious personally-though there is a piece in the Times business section which is surprisingly bullish.

    Time will tell.

    It makes the politics more interesting !

  8. Colin – a non partisan observation is that I think all parties have come round to recognising that ‘early intervention’ has got to be extended.
    For every awful fatal case there are scores of other children suffering neglect and other forms of abuse whose chances of emerging as normal contributing members of society are minimal.

    £2Bn or whatever on spent properly and increasing at a rate commensurate with increases in staff numbers and better training would save much more down the line through lower crime, prison costs, drug abuse etc.

    I hope that as Economic growth allows spending in this area is a priority.

  9. 40% again

    Looks like both the Tories and LD have notched up an extra point or to, Yougov registering a lead for the Tories amongst the 18-24’s again. So that’s I think 8 out of the last 10 with near parity or a Tory Lead in this crossbreak ,completely inconsistent with all other pollsters. Who show a substantial Labour lead in this age group, which has been reflected in every past general election .

    Perhaps AW can answer the methodology question.

  10. From what I am reading about the banks, don’t get too attached to growth as I doubt it will be here long. All we (UK, US, Eu) have done is burn money for 5 years to end up in a situation worse than 2008. Another big bank collapse (and there are several reported to be on suicide watch – Citi, Barclay’s, Deutche Bank) would change the narrative again.

  11. I’ve seen a couple of people on here suggesting growth won’t last. Can anyone explain why they think this?

  12. Good Morning COLIN.
    Our own safeguarding officer in school says the 2011 Munro Report for child safety is going to worsen protection.

    I have not read the report; too upsetting an area for me. However, I think child protection requires a Wilberforce type of campaigner.

    In terms of Labour’s V1, I do not see it shrinking much, but the tories should be able to pick up LD and UKIP votes in the run up to 5/2015.

  13. Colin

    “The Labour VI is pretty solid.

    What can reduce it ?”

    A few years in Government usually does the trick.

  14. @Colin

    Can anything bring down Lab VI?

    I think the Crosby immigration strategy has boosted or formed up Con VI at around 33%. Of those, I suspect the Tories believe that practically all will vote Tory in 2015. Conversely, I don’t think they believe Lab will poll 38-40%. So the,Tories probably believe they are in a reasonable position.

    Immigration is probably the key generally, as it seems the only way that Tories can eat into Labour strongholds in inner cities and, the North, and win over Labour waverers in the Midlands.

  15. No one seems to have commented on the Welsh Assembly result at Ynys Mon. Plaid landslide in a previous marginal, which Labour hold at Westminster. Bags of special and personal factors. However I suspect this seat may have been close to 650th on UKIPs Westminster target list – and they produced an astonishing 3rd place, close to Labour’s 2nd. Tory vote collapsed. LibDems a humiliating bottom of the poll behind TUSC. For UKIP to have done that well when there was already a charismatic nationalist candidate to support makes me once again question (see previous posts) the constant downsizing of the UKIP vote in all the opinion polls through weighting. There was a 42% turnout in Ynys Mon, which is pretty respectable. There is no need to make outlandish suggestions for GE 2015, but I simply cannot imagine that they will fail to win 5-10 seats, and a double figure % of the overall vote.

  16. From BBC website news of a clear win yesterday for Plaid in the Anglesey AM by-election, with Labour beating UKIP into third place by 300 votes.

    Figures
    Rhun ap Iorwerth (Plaid) 12,601 (58.24%, +16.82%)
    Tal Michael (Lab) 3,435 (15.88%, -10.33%)
    Nathan Gill (UKIP) 3,099 (14.32%)
    Neil Fairlamb (Cons) 1,843 (8.52%, -20.70%)
    Kathrine Jones (Soc Lab) 348(1.61%)
    Steve Churchman (Lib Dem) 309 (1.43%, -1.73%)
    Plaid maj 9,166 (42.37%)
    13.58% swing Lab to Plaid
    Electorate 51,024; turnout 21,635 (42.40%, -6.)

  17. Mr nameless

    Why growth won’t last?

    Debt can’t rise for ever, even at low interest rates there comes a point where folk can’t service any more debts

    Oil prices rising again, any real recovery would see oil prices shoot up as demand increases but supply stays the same if we are lucky

    Decline in real income, folk have less money in their pockets and theonly way they can continue to consume at “normal” levels is to borrow, which brings us back to the first point

  18. @RAF

    According to Andrew Rawnsley recently…

    “It is not just history that is stacked against them. So is demography. As extensive research by Michael Ashcroft has illustrated, the Conservatives have very little support among ethnic minority voters who are now a key constituency in many of the suburban marginals.”

    If that’s the case one might think Tories could instead try to win them over. Alternatively, how do floating voters poll on immigration. Is it as big a deal for them as for others?…

  19. I’ve been looking at some by-election results for council seats and what seems to be emerging is a UKIP “anti-incumbency” vote, depending on who is in power.

    For instance, this by election in Walkergate:
    http://www.englishelections.org.uk/england/lby/northeast/walkergate.php

    A huge first showing for UKIP on 27%, almost entirely at the expense of Labour. Of course, this could be anti-incumbent but could also be because the Tories haven’t a hope in hell there (they came 6th).

    Ditto this one in Primrose: http://www.englishelections.org.uk/england/lby/northeast/primrose.php

    However, we also see them do huge damage to the Tories. In Bletchley, where the Tories came 48 votes from winning, the UKIP vote came almost entirely from the Tories and gave Labour a healthy 500 majority.

    http://www.englishelections.org.uk/england/lby/southeast/bletchleyfennystratford.php

    For balance purposes, in Weaste and Seedley, UKIP are gaining from the Lib Dems (second in 2012, now 7th) as well as a bit from the BNP. The Labour vote has gone down too – some probably to UKIP, others to the Greens and TUSC.

    http://www.englishelections.org.uk/england/lby/northwest/weasteseedley.php

    Now it’s obviously bad to extrapolate too directly from local elections to the GE, but it’s clear that the anti-establishment vote can be pretty powerful. I would suggest that with a decent ground game UKIP can indeed win seats on that premise. I suspect they’re mostly going to be safe Tory or Labour seats, where the opposition votes UKIP just to kick their enemy out.

  20. Welsh Borderer

    It is an interesting result because UKIP seem to do well in all sorts of places where we would not expect when they stand.

    Of course in this situation it is difficult to see where votes go but it is tempting to say Labour to Plaid and Tory to UKIP.

    The party to worry about this the most is the LD I think as it may be that they will not see their normal rise at GE time as UKIP hoover up protests. I think the Tories will also be worried about the risk still being that UKIP will take 5% of their vote and let in Labour

  21. Alec

    There is a media narrative that things are improving all over, but it’s based on selective data, Spain, Portugal, Greece and Italy are still contracting though we really need another more descriptive term for Greece. India, China, Brazil and other big emerging markets(I really hate that label) are slowing down with many suggesting that some are flirting with outright contraction. And of course the big daddy of the global economy has seen 3rd and 4th quarter growth forecasts savagely cut by most analysts

  22. Welsh Borderer
    I had checked back, assuming someone must have already posted about this, but you beat me to it. Great minds anyway.

    Cautious to draw too many conclusions but yes this is a significant result and should give several parties a lot to think about.

  23. @bcrombie
    I agree LDs won’t pick up protest votes in a campaign, nor did they much in 2010 either.

    However there will be some retrenchment of tactical voters faced with the same problem of FPTP – their choice is LD or Tory, or (to a lesser extent) LD or Labour, and some of those voters will again choose to vote tactically.

    I’m fully expecting the LDs to be stuck in the low teens come election day, probably just about in third place ahead of UKIP.

    But I wouldn’t read anything for LDs into a result from Ynys Mon – this has been one of LDs worst dozen seats nationally since God was a boy…

  24. RiN,

    Indeed. The unemployment rate is flat-lining at the moment. It is still above the level it was in May 2010. The “improvement” is the fact that it was even higher in 2011.

    http://www.bbc.co.uk/news/10604117

  25. BFG

    I too expect low teens for the LD with significant losses in the North and Scotland/Wales but keeping their seats in the South (depending on TV and the role of UKIP)

    I wouldn’t use this seat for LD either – for me the penetration of UKIP is more interesting and if this is replicated and brings out protest voters then 2015 will be very difficult to predict. I still think the pollsters are all at sea over their effect.

    A 10-15% UKIP will be a game changer

  26. @ Ian Bailey
    I don’t hear anything about the banks mentioned in your comment – Citi, Barclays and DB are all pretty solid, and certainly not on suicide watch.

    Where are you hearing this from?

  27. Colin

    Now you know better than to get transfixed on what parties VI is now compared to what they will be in 2015.

    The local tory party is in good spirits at the moment a lot of the bile from gay marriage and the EU have disappeared and although many in the party will never embrace DC at least the recent set of VI from ALL the various polllsters have been encouraging and they think the party is on the right lines at long last.

    As I’ve said before you may have a solid lead if you regularly score 10-20% over your opponents but when you lead is on a slow decline and gone to single figures and of late have been between 3% and 6% what you have is a lead and not a very big one regardless of what your VI is.

    You often sight the economy and if your looking to dent that 38-40% for Labour it will be just that the economy improving.

  28. Countries may be reporting growth but that’s not being felt by the man in the street.

    The BBC are reporting a Money Advice Service report:

    “More than half of UK adults are struggling to keep up with bills and debt repayments, a major survey of people’s finances has suggested.

    Some 52% of the 5,000 people questioned said they were struggling, compared with just 35% in a similar study in 2006, the Money Advice Service said.

    In Northern Ireland, some 66% said they were struggling.”

    http://www.bbc.co.uk/news/business-23534877

    As always, there are some people are doing very well out of this recession but there are many more barely able to get by from one week to the next – the explosion in demand for food banks surely proves that.

  29. Big fat Ron

    Ian Bailey is right, there have been a fair amount of talk especially about those 3 but it won’t be allowed to happen, if they could let a whole country go under to save some French banks, tear up the accepted definition of default to save a British bank. God only knows what they would be prepared to do to keep the biggest German bank from going under

  30. More good news………..
    LONDON (Reuters) – British construction activity jumped sharply in July to hit its highest level in over three years, led by a surge in residential building, a survey of purchasing managers showed on Friday.

    The Markit/CIPS construction PMI leapt to 57.0 last month, up from 51.0 in June and its strongest level since June 2010.

  31. @toh

    Amazing what a state housing stimulus will do, eh?…

  32. @Chordata

    You refer to “this recession”, actually the UK has not beeb in recession since the last Government. Don’t get me wrong I agree the economy has been bumping along the bottom until recently

  33. @ TOH

    And Ferrari have said that the UK is now their biggest market in Europe. Must be all the Ruskies/Arabs living in the London/Surrey area. Hope they are paying full UK taxes !

    Makes you think about the cap on net migration numbers. How much of the increased business activity being experienced is down to increased population, particularly from recent immigrants to the UK ?

  34. Interesting comment seen on NORBOLD’s Thetford link:
    “UKIP increased both vote and share, and that Labour poured everything into this. ” Also the turnout was up. Looks as though Labour won by getting their support out to vote – the best method.

  35. @HUCKLE
    Don’t forget the French!

  36. @ToH

    “Recession” doesn’t have a clear definition. There is a Political definition, two consecutive quarters of negative growth, that was produced by the Lyndon Johnson Administration so they could go into an election claiming that the stagnant economy of the time was not in recession. It’s having the same benefit to our Government, because they can claim that the stagnant economy between 2010 and 2013 was not technically a recession, because there were enough periods of very small growth.

    Incidentally, Johnson’s attempt at political cover didn’t work. He is one of the few sitting presidents who was not re-nominated by his party.

  37. Mr Nameless – With regards people saying do not get too attached to growth. The banking system has only been tinkered with(bankers bonus were huge again this and last year). There are a number of banks in serious trouble across the globe. Banks lend to each other. Just like previously, once one bank goes, the rest start to struggle and like a domino effect we are back to where we were a few years back. The UK will be even more exposed because we are now even more reliant on the service sector than we were in 2008.

    The problem for UKIP is once they win the council seat they struggle to keep hold of them. They have had numerous seats where there has had to be another bye-election because previous the winner has endured a misdemeanour (Thetford yesterday was due to the candidate who won in May shoplifting at Poundland).

  38. Turk,
    I refer yo to my post last night regards the fortunes of the Conservative Party:

    There are three major obstacles for the Conservatives to win the next election:
    1 – First Past the Post – The Conservatives blew one of their big chances by shafting the Lib Dems over Lords reform. If they would have agreed to it, [the boundary review would have gone through] and would have made their election easier.To gain a majority the Consevatives need (depending who you listen to) anything from an 5% to 8% lead whilst Labour (again depending who you listen to) only need a 2 to 4 % lead.
    2. The Lib Dem switchers once the coalition was formed. These have attached themselves limpet like to the Labour Party. I actually know quite a few of them and one is a close friend. He doesn’t particularly like politics and if he is sat amongst a group talking about it will go glossy eyed and sometimes drop the hint by yawning. That is until you mention two words “Nick” and “Clegg”, he will then more or less take over the conversation with an expletive filled rant about him and explain how he will never vote Lib Dem again and is voting Labour. He like many feels like they were personally lied to at the last election with Nick’s “new politics” and I could quite imagine they would vote Labour no matter who their leader was. It is no great endorsement of Ed Miliband but many of the switchers want revenge and cannot wait until 2015. You only have to look at the range of the Labour vote for the last few years. It doesn’t go below 36% (except the odd moe poll) or above 40%, whilst the Conservative votes has had higher peaks and troughs.
    3 – UKIP – The UKIP vote may be decreasing at the moment but the fact that as the UKIP percentage decreases the Conservative one rises, it kills the argument that UKIP were effecting both Labour and the Conservatives similarly. Also, UKIP percentages have risen as elections have come along, and there is no bigger oxygen for their party than next years Euro election (which they are still favourite at the bookies to win the popular vote) so will see their vote rise again, which will have a negative effect for the Conservative Party. Yes it may fall again afterwards, however, if it their percentage continues in the same form, it will rise again in 2015.
    The rise of UKIP has altered the whole spectrum for the Conservative Party. In years gone by they would move towards the centre to try and take some Lib Dem votes. Now they have had to move rightwards to win back the UKIP vote, which then alienates the non-orange book Lib Dems(who have up to now stuck with their party) who could then turn to Labour, to in their eyes, prevent a right wing Tory government.

    So all in all, without even mentioning governing parties struggle to increase their percentage, the Conservative Party could not win a majority against a party that had been in for 13 years and they couldn’t beat a party with Gordon Brown at the helm, who was very unpopular, everything points towards the likelihood of there being a Conservative majority in 2015 very very slim indeed.

  39. The elephant in the room is interest rates, which despite the central bank rates remaining on the floor are all inching upwards. For example the US 10 year bond rate has increased by 82% from 1.48% to 2.70%. Compared to normal rates of the past few decades that remains very low.

    Why is that a problem? Many reasons. All governments have had to slash interest rates to prevent their economies imploding under the debt load. Inflation is up, borrowing rates are up, so the traditional remedy would be increase base rates. Except they can’t, because the big US banks have a $440 TRILLION dollar exposure to interest rate derivatives, and even a small rise in rates would wipe them out. Its no different here or in Europe. Deutche Bank have EUR55tn exposure vs the EUR2.7tn German GDP.

    With the greatest of respect to the “there’s nothing wrong with these banks” comments, yes there is and can I refer you to zerohedge.com who will furnish you with endless reportage precisely what the issue is. The financial situation is far worse than in 2008 and central banks are running out of options (and cash and more especially gold!) to even keep up the pretence that the system is robust.

    And from a UK polling point of view, any kind financial crisis will change things around yet again. All I am saying is that the narrative of lead narrowing + economy fixed = Tories win doesn’t take into accounts Harold MacMillan’s Events dear boy, Events…..

  40. Big Fat Ron: see below articles (sorry for the linksAnthony):

    h ttp://www.bloomberg.com/news/2013-05-13/banks-on-verge-of-collapse-in-denmark-win-time-as-fsa-steps-back.html

    h ttp://investmentwatchblog.com/banks-on-the-verge-of-collapse-up-to-46-of-bailed-out-homeowners-cant-pay-their-mortgage-again-monthly-home-payment-soars-40-to-2008-levels-and-bernanke-is-definitely-going-to-taper-soon/

    h ttp://www.forbes.com/sites/afontevecchia/2013/06/17/china-massive-credit-bubbled-fueled-by-shadow-banking-and-securitization-could-collapse-banks/

  41. Here’s a different sort of poll
    More than half of UK adults are struggling to keep up with bills and debt repayments, a major survey of people’s finances has suggested.

    Some 52% of the 5,000 people questioned said they were struggling, compared with just 35% in a similar study in 2006, the Money Advice Service said.

    In Northern Ireland, some 66% said they were struggling.

  42. Steve,
    there are plenty of polls out there with very similar readings to the one you quoted. I know this personally because I seem to get asked very similar questions as the one you quoted in polls I complete at least twice a week and then check up on the results when they come out.

  43. WELSH BORDERER

    -To be fair to the LD’s they only got 3% of the vote last time

    If you think PC will get 5-10 seats in a General Election I think you are in for a disappointment as in their entire History they have never managed better than 4.

    But as they say:

    Ond dydych chi byth yn gwybod pethau dieithr wedi digwydd!

  44. Steve

    Do they really say that?

  45. Usual Friday morning warning about reading too much into by-elections. UKIP is obviously suffering from “You promised I wouldn’t get elected” syndrome – they also lost a May seat to the Tories in Worcs, who presumably threw everything at that by-election as Labour did in Norfolk.

    As for Anglesey, it’s almost a definition of a seat with special circumstances – from geographic seperation to the recent troubles with its council. UKIP’s 14% didn’t even capture all the loss from the Conservatives (I suspect they’re picking up mainly votes from retirees from NW England). Labour probably didn’t help themselves by choosing Tal Michael who could well have been seen as a Taffia princeling parachuted in (he also lost the North Wales PCC election you may remember).

  46. STEVE

    […]Yougov registering a lead for the Tories amongst the 18-24?s again. So that’s I think 8 out of the last 10 with near parity or a Tory Lead in this crossbreak, completely inconsistent with all other pollsters. Who show a substantial Labour lead in this age group, which has been reflected in every past general election .

    If you look at the last 16 cross-breaks for under-25s in YouGov polls they are from earliest to latest (Con-Lab-LD-UKIP):

    35-34-13-9

    36-37-10-13

    19-62-2-6

    31-39-7-11

    31-36-14-11

    26-45-15-1

    32-36-14-4

    26-38-23-3

    27-40-18-9

    44-36-4-6

    38-29-16-9

    30-40-14-7

    33-41-11-2

    41-37-8-8

    31-46-9-7

    37-35-13-4

    So it’s actually 4 of the last 10, though it is 4 of the last 7, and it is a bit odd that since we saw what looked like that anomalous 44%, three of the next six cross-breaks have also shown a Conservative lead in this group.

    As I pointed out last time, this is a particularly febrile cross-break, so short-term trends should be treated very cautiously. It could be methodological – this is the hardest of groups to reach and so easy to make a mistake with – but if there is real movement we wouldn’t expect to see evidence from the other pollsters yet as it would be too recent.

  47. Speaking of other pollsters, Populus’s Friday poll (f/w 31 Jul- 1 Aug) is now out:

    Con 29% (-5)

    Lab 40% (+1)

    Lib Dem 11% (-)

    UKIP 12% (+4)

    Changes from last poll (26-28 Jul)

    Tables are here:

    http://www.populus.co.uk/uploads/Online_VI_02-08-2013_BPC.pdf

  48. @ Ian Bailey, Red rag

    With apologies, but any commentator who references interest rate derivative notionals as a meaningful measure of risk is – bluntly – too ignorant or mendacious to take seriously. To illustrate very simply, a bank that has a hedged IRD exposure has twice the notional outstanding to a bank with a naked position. I.e reducing your risk results in an increased notional total.

    In one case I do know detail about, DB’s exposure to outright interest rate risk is low in historic terms, and far less than when the banking crisis hit; this is equally true for most other banks.

    Remember that for every loser on an IRD contract there has to be an equal and opposite winner; unlike CRDs the opportunity to take fictitious profits across the market by modelling IRDs differently in different institutions is pretty much nil – the models are too mainstream and do not rely on assumptions like default rates that can be easily manipulated.

    Moreover almost all IRDs are fully collateralised, including a sizeable proportion of interbank trades which are being migrated to third party exchanges, further mitigating counterparty exposure.

    I agree that rising interest rates do represent a risk to the wider economy (although remember that investors and companies with cash deposits and short term investments will benefit, not lose out, from rising rates), but picking out IRDs as a risk multiplier is not really valid.

    Bluntly, this blogger either doesn’t know what he is talking about or, more likely, does know but is happy to scaremonger.

  49. Big fat Ron

    Yes all those positions net out to close to zero as long as there is not a break in the collateral chain, but that’s the problem with chains, they are only as strong as their weakest link, if one outfit can’t pay its dues ,it cascades through the entire system

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