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UK: Farage Set For Comfortable Win In 13 Aug By-Election (1/2)

Aug-12 14:12

A parliamentary by-election takes place in the Clacton constituency in eastern England on Thursday, 13 August. The election was called due to the resignation of incumbent MP Nigel Farage. The leader of the right-wing populist Reform UK resigned in early July amid intense scrutiny and a parliamentary investigation into his personal finances and allegations regarding undeclared gifts. 

  • Farage said he would allow voters to decide his fate, rather than journalists. No mainstream political parties are running candidates against Farage. They accuse him of embarking on an expensive political stunt, leaving a record 33 independents and satirical candidates alongside Farage on the ballot.
  • The Reform UK leader is expected to comfortably retain the seat, with the sole opinion poll of the campaign showing Farage with 73% support to 20% for comedy writer Jonathan Harvey, running as satirical candidate 'Count Binface'. Polymarket shows bettors assigning a 99% implied probability that Farage retains the seat.
  • No exit poll will be carried out for the by-election. In the 2024 general election, the constituency declared at 03:28BST. However, given the number of candidates, the ballot paper is much longer than usual. This will make the process of counting and bundling physical votes more laborious, potentially pushing the declaration beyond 05:00BST.
  • After the by-election, focus will then turn to the parliamentary investigation that will resume once Farage (presumably) regains his seat in the House of Commons. 

UK: Farage Set For Comfortable Win In 13 Aug By-Election (2/2)

Aug-12 14:12
  • If the Parliamentary Standards Committee finds that Farage broke parliamentary rules and suspends him for 10+ sitting days, he could face a recall petition and another by-election. In this case, the other parties have said they will run candidates against him.
  • A second by-election as soon as the autumn could provide a sterner test for Farage. Prior to Reform UK winning the seat in 2024, Clacton had been held by the centre-right Conservatives, and it is Kemi Badenoch's party that would likely most heavily target Farage in a second contest.
  • That said, the governing centre-left Labour Party has experienced a polling bounce in the wake of Andy Burnham ousting Sir Keir Starmer as prime minister, and it may fancy its chances in a constituency with some of the poorest electoral wards in England.
  • Nevertheless, given his popularity in the seat and the granular voter data Reform UK will have been able to glean from canvassing in this by-election, Farage would likely remain the favourite to take the seat.
  • A broader concern for Reform UK is whether the 'Burnham bounce' in opinion polling support for Labour proves sustained. Although unlikely, there is the prospect that a consistent 4-8 point lead for Labour over the coming month or two sees Burnham call an early general election to capitalise ahead of the Budget statement scheduled for 28 October. 

US TSY FUTURES: BLOCK: Sep'26 2Y Buy

Aug-12 14:03
  • +5,000 TUU6 103-00.88, post time offer at 0950:54ET, DV01 $184,700
  • The 2Y contract trades 103-00.75 last (+2.12)