Before 1 Jan 2027

Base-rate analysis: Historically, the average tenure for a UK Prime Minister since 1900 is approximately 3.7 years. Given the current PM Rishi Sunak took office in October 2022, a departure before January 2027 would imply a tenure of less than 4 years, which is common. Factors like upcoming general elections (expected in 2024), potential party leadership challenges, or resignations contribute to a significant probability of a change within this timeframe, aligning with historical patterns of PM turnover.

Reference-class forecast: Historically, UK Prime Ministers who have served less than two years and faced significant political challenges, especially after a general election, have a moderate chance of leaving office within a similar timeframe. The current political climate, including potential post-election instability and the inherent volatility of PM tenures, suggests a slightly higher probability than the market implies. The Conservatives are trailing significantly in polls, and a new Labour PM would face the usual challenges of a new government, while a Conservative PM might face internal pressure after an election loss.

Red-team challenge: The market consensus for 'No' suggests Sunak will remain PM past 2027, likely due to a potential Conservative recovery or a hung parliament. However, this view underestimates the historical volatility of UK premierships and the current political landscape. Sunak's approval ratings remain low, and a significant Conservative defeat in the next general election, which must occur by January 2025, would almost certainly lead to his resignation or removal. Even if the Conservatives manage a narrow victory or form a coalition, the pressure from within the party for new leadership after a difficult election campaign could be immense, especially if the result is perceived as underwhelming. Furthermore, unforeseen events or scandals are always a risk in politics, potentially forcing an early departure.