The local elections of 2026 have been billed as the UK witnessing the generational breakaway of the electorate with its traditional parties of Labour and the Conservatives.

As the electorate heads to the polls, Thursday is set to redefine the political map of UK politics, disrupted by Reform UK and the Green Party – the two populist movements shaking up the electorate.

Thursday is shaping up to become a defining political test for Prime Minister Sir Keir Starmer, with the Betfair Exchange markets forecasting heavy losses for Labour and a breakthrough performance for Reform UK and the Green Party.

As the electorate heads to the polls on Thursday, more than 1,600 council seats across England, Scotland and Wales will be contested in what is expected to become the first major electoral verdict on Labour since Sir Keir Starmer secured a landslide victory in Westminster in 2024.

The Betfair Exchange markets currently make Reform UK overwhelming favourites to win the most seats at odds of 1.02 — implying a 98% chance that Nigel Farage’s party will top the national tally.

Despite setbacks in parliamentary by-elections such as Gorton & Denton and Caerphilly over the past six months, Reform’s anti-establishment positioning and sustained momentum in national polling appear increasingly suited to local election dynamics.

James Mackie, spokesperson for Betfair Exchange tells SBC that “Thursday’s contests could permanently reshape the political landscape”.

“As the first big opportunity for voters to have their say since the last general election and the odds pointing to big losses for Labour, the 2026 local elections are set to have a huge effect on UK politics.”

The Green Party is also forecast to emerge as a significant disruptor. 

Under the leadership of Zack Polanski, the Greens have increasingly targeted Labour-held progressive and urban constituencies, seeking to capitalise on voter frustration with the government’s direction. 

Betfair currently prices the Greens at 1.88 (53% chance) to finish second overall and 1.58 (63% chance) to outperform Labour in total seat gains.

“Reform are 1/50 to win the most seats and the Greens fancied to pick up more seats than Labour at 8/11, we should brace for major change with voters primed to shun the big beasts of UK politics,” Mackie added.

For Labour, the market outlook reflects mounting unease around Starmer’s leadership less than two years after returning the party to power. Exchange markets place Labour at 100.00 (1% chance) to win the most seats, only marginally ahead of the Conservatives at 110.00 (0.9% chance), underlining how both legacy parties continue to struggle with voter dissatisfaction.

Political traders are also beginning to factor in the possibility of leadership instability should Labour suffer the scale of losses currently projected. Betfair punters make Starmer the favourite to leave as Labour leader between July and September 2026 at odds of 2.42 — a 41% implied probability.

The Prime Minister has faced sustained criticism in recent months following a series of political missteps, including the controversial appointment of Peter Mandelson as UK ambassador to Washington, a decision that triggered internal backlash and renewed scrutiny over Starmer’s judgement.

“And there could be short-term ramifications for the current leadership of the country – a disastrous night for Labour will surely see calls for Sir Keir Starmer to step down,” Mackie stated.

“With the PM as big as 7/1 to lead Labour into the next election and an exit between July-Sept strongly fancied, bettors seem to have made their mind up on Starmer’s future already.”

Starmer fall guy

Attention has consequently shifted towards potential successors. Greater Manchester Mayor Andy Burnham has emerged as the market favourite to become the UK’s next Prime Minister at odds of 4.0 (25% chance), despite not currently holding a Westminster seat.

Reports over the weekend suggested Burnham had held discussions with MPs in north-west constituencies about securing a route back to Parliament through a by-election.

Burnham had previously sought selection for Labour in the Gorton by-election earlier this year before being blocked by the party’s NEC — a contest Labour ultimately lost to the Green Party. Deputy Prime Minister Angela Rayner follows closely behind in the leadership market at 4.5 (22% chance).

“Should Starmer step down it looks set to be a battle between two northern powerhouses with Angela Rayner 11/4 and Andy Burnham 3/1 the current favourites,” Mackie concluded.

Beyond Thursday’s immediate results, betting markets are increasingly treating the local elections as a key indicator of the next general election landscape. Betfair currently prices a hung parliament at 4/6 (60% chance) as the most likely national outcome, while Reform UK are priced at 4/1 (20% chance) and the Greens at 39/1 (2.5% chance) to emerge as future governing forces.

“The results of Thursday’s votes will inevitably colour the picture as we look to the next general election,” Mackie said. “A hung parliament is currently the favourite at 4/6 but a big shift to Reform or Green may see some movement there as that picture clears.”