Pound slides as businesses express fear at prospect of Jeremy Corbyn victory after poll shows Labour closing gap on Tories
MARKETS were sent into a flurry of activity this morning after a new poll showed Jeremy Corbyn’s Labour closing in on the Tories.
The five point gap in the YouGov poll – down from 24 on the day the snap election was called – is the smallest lead the Tories have enjoyed since Theresa May became PM.
The pound fell this morning on the back of the news – and the Euro saw a jump.
Sterling fell by as much as half a percent against the Euro compared to levels seen last night – its lowest in two months.
The value of Sterling dropped below $1.29 against the dollar overnight too as Labour saw a surge in support which is worrying businesses.
With less than a fortnight to go before Britain goes to the polls, investors are concerned as the polls show Labour closing in on the Tories.
And both the FTSE 100 and FTSE 250 markets have set new record peaks today as more trading takes place.
Our currency is still around 15 per cent lower against the dollar since the Brexit vote last June – but American tourists are keen to take advantage of it with more visitors choosing to come to the UK.
Conservative support has had a bit of a wobble this week as Mrs May was forced to backtrack on some of her social care plans.
Campaigning was paused for three days in the wake of the bomb attack in Manchester on Monday evening.
But today Jeremy Corbyn’s resumed campaigning – when he made a speech on foreign policy.
The Labour leader was attacked for the poor-timing of the speech, just four days after the atrocity which left 22 dead.
He said today Britain need a response to Isis which “fights rather than fuels terrorism”.
Market analysts say that the election is likely to have a big impact on the pound on the run up to the June 8 vote.
Jordan Rochester, a foreign exchange strategist at Nomura, wrote in a note to clients: “The pound is likely to continue to be under pressure now until the election is out of the way if polling continues to indicate it’s a tighter race.
“For the market the worst outcome is if we have further uncertainty with the chances of a hung parliament.”
The pound soared to six-month highs after Theresa May called the snap election – with many predicting she would win a landslide victory.
But as her party has wobbled in polls, that now looks less likely.