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After what can only be described as a torrid time for the Labour party on the betting markets over the last 3 months, something has changed.

Swiftly and suddenly, the market seems to have come to a new understanding of Labour’s chances of actually winning the election. Labour are still behind in terms of becoming the largest party, and sit at a dismal 2-4 per cent when it comes to the probability of winning a majority, but yesterday Ed Miliband briefly became favourite to be the next PM after the election.

Over the last 3 months the market gave Cameron a 60:40 chance of remaining as PM after May 7. That probability has now narrowed to 50:50.

Miliband and Cameron are both 10/11 to be Prime Minister in the first post-election Queen’s Speech with Ladbrokes (Cameron is still very slightly favoured to be PM on August 1 with William Hill).

Why have things changed? The latest Ashcroft polls may be one reason, but if that were the case then the markets would also show the Labour party closing the gap on the Tories as the largest party. (They haven’t – Ladbrokes still give the Tories a 10-seat lead.) Whilst there has been a slight narrowing of differences between the two parties the Conservatives remain far out in front on that count.

The reason for the change seems to be the same cause that imperilled Labour’s once-held position as favourite to win most seats: the SNP.

The penny seems to have finally dropped – the SNP will back Labour.

The market clearly believes SNP support remains as strong as ever (as May2015 stressed this week). And now, following the national leaders’ debates and back-to-back Scottish versions, the penny seems to have dropped.

The probability of the SNP walking into parliament’s lobbies with Labour is now something the market is taking seriously. It may have taken the explicit statement of Nicola Sturgeon saying “I’m offering to help Ed Miliband into Downing Street” to finally convince the markets.

This week the markets shifted. They are no longer dully pointing in the same direction (a slim Tory win). This race really is now too close to call.