LONDON (Reuters) - Goldman Sachs said on Tuesday that Prime Minister David Cameron’s Conservatives were marginally more likely than Labour to win the most seats in Britain’s national election on May 7 and to form the next government.
The election is likely to be the closest in memory because of the rise of anti-Europeans and Scottish nationalists who have created uncertainty unseen in Britain since the 1970s.
“The likelihood of any party gaining an overall majority appears low, but we think the Conservative Party is marginally more likely than Labour to win the most seats and lead the next government,” Goldman Sachs said in a research note.
“Our view is that the Conservatives are likely to do better than the latest opinion polls suggest,” Goldman analyst Kevin Daly said in the note, adding that strong economic growth and an improvement in disposal income could help the Conservatives.
Goldman said opposition Labour leader Ed Miliband could boost his chances of winning if he performed well in the campaign, noting that the way Britain’s constituencies are currently divided favours Labour.
YouGov on Tuesday said its latest poll of voter intentions put Labour on 34 percent, the Conservatives on 31 percent, the Liberal Democrats on 7 percent, the UK Independence Party on 14 percent and the Green party on 8 percent.
“If the Conservatives win the election, attention is likely to turn quickly to the referendum on EU membership that David Cameron has committed to hold,” Goldman said.
“We have argued that a UK exit from the EU would be costly, but is still unlikely.”
Reporting by Guy Faulconbridge; Editing by Andrew Osborn