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When I was there (about 10 years ago) it was all done manually, but I guess there is automation on some markets nowadays - but not on markets such as a next manager market. If a clued up punter has a £50 bet, it will mean a candidate's price gets slashed. But a mug punter might have £500 on and...

I assume you are joking. Either that or you are extremely naive. I worked in the trading room of a bookmakers for a couple of years. There are punters who virtually never bet a loser on these markets. As soon as they have a bet, the odds get slashed appropriately. Unless the bookmaker is...