Yahoo Finance Pound sterling falls to lowest level since April after Labour slashes Tory lead in latest election poll
The pound suffered its biggest one-day slide in around three weeks on Friday after a new poll showed that Labour had slashed the Conservatives’ lead to just five points ahead of next month’s general election.
At the London stock market close the pound was more than 1 per cent lower against the dollar, at $1.2787, its lowest level since the end of April.
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Sterling already slipped on Thursday after the Office for National Statistics revised down the UK’s growth in the first quarter to just 0.2 per cent.
The currency remains around 13 per cent lower against the dollar since last June’s Brexit referendum, but had tentatively edged higher this year and rose sharply after the 8 June general election was announced on 18 April, with investors hopeful that a vote would strengthen Theresa May’s hand in Brexit negotiations.
The latest poll indicates that the outcome of the election is less certain.
“With political uncertainty likely to heighten ahead of the UK general election on 8 June, sterling could become even more attractive to bears,” said Lukman Otunuga, a research analyst at broker FXTM.
The poll indicates a four point change since last week when the Tories were leading by nine percentage points – the first time Labour has narrowed the gap to single figures since the Prime Minister called the snap election.
It follows Ms May making an unprecedented U-turn over her “dementia tax” plans, just four days after making them the centrepiece of her election manifesto.
Friday’s slump in the pound helped the FTSE 100 to a fresh all-time closing high of just under 7,550.
About two-thirds of FTSE 100 revenue is generated overseas, meaning the index tends to perform well when the pound falls. Income generated abroad is worth more in sterling terms when it’s brought home.
