UK Conservatives May Actually Lose the Election

Despite facing one of the most unpopular prime ministers in a generation, UK opposition leader David Cameron is facing the prospect of losing the next election.

A YouGov/Sunday Times poll over the weekend showed Cameron's lead in the polls had fallen to just 2 percent over Gordon Brown, having stood at 20 percent this time last year.

The news cast a shadow over what should have been Cameron's coronation party at his spring conference in Brighton this weekend. His party faithful are now asking why Cameron and his number two George Osborne cannot close the deal with UK voters, given there are so many factors working in their favor.

First up is the economy. Gordon "No More Boom and Bust" Brown should be out of the game on this issue, given that his government's failure to curb borrowing in the good times led to Britain struggling to cope with the credit crisis when it hit.

Secondly, having talked about light regulation since taking power in 1997, the Labor Party should be an easy target for Cameron now that many critics complain that a free hand for banks over the past 10 years brought about the financial meltdown.

And thirdly, Brown is widely disliked, poor at communicating his message to the public and just last week was accused of bullying junior members of staff.

So Who's Against Cameron?

The economy remains the key to the election which is expected to be on May 6th. The UK opposition claims it will cut the budget deficit far quicker than Labor in a bid to defend Britain's Triple A rating.

Warning that the biggest risk to the UK is higher borrowing costs, George Osborne, the shadow Chancellor, claims that only bringing down spending will protect home owners and consumers from far higher costs.

This policy has done two things. One is put off the 6 million voters who work for the public sector. They know under a Conservative government, their pay would be hit and will, despite anger towards Brown, back Labor as a result.

The other factor at work here is credibility. For all Brown's mistakes, the UK economy is now out of recession and the public know that while some of the problems facing Britain are unique, the rest of Europe and the US face an equally challenging environment.

Given Cameron has been light on the details of what he would actually do to curb borrowing, the public remains skeptical about his stance in an area that should be an own goal. His speech on Sunday did little to change this perception, with its vague promises of unleashing the forces of enterprise free and cutting corporation tax for big and small businesses.

Like Tony Blair?

On regulation, the Conservative Party stands behind the so-called Volcker rule, but in a bid to distance itself from the City of London has managed to alienate one of Britain's biggest industries without winning plaudits from the public for their banker-bashing.

Cameron has gone a long way to make it clear he would be a leader of the people and for the people.

Unfortunately he just cannot close the deal with voters who liken his style to that of Tony Blair and believe him to be a highly privileged member of the ruling classes despite his best efforts to talk up his support for public services and the average man and woman in the street.

As Steve Barrow from Standard Bank told CNBC's Squawk Box Europe, the last poll makes the chances of the Brown victory or a hung parliament far more likely.

For all Cameron's discussion about a frank conversation with UK voters, he has yet to be frank enough with a country that believes a frank conversation is about details not sound bites.