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Pound falls as poll shows Conservative lead shrinking

Pound falls as poll shows Conservative lead shrinking

The pound has fallen to a two-week low against the dollar after a new poll showed the Conservatives' lead over Labour had fallen to just five points.

The YouGov poll showed 43% support for the Conservatives versus 38% for Labour. That marks a dramatic narrowing of the Tory lead, which has fallen from around 18 points over the last two weeks.

Tory plans to reform social care appeared to prompt this slide in support, with the Conservative's lead sliding to just nine points in polls published over the weekend.

But despite a U-turn over the proposals, with prime minister Theresa May announcing an 'absolute limit' on the amount people would pay for care under the new means-testing regime that would include the value of homes, the Tories' slide has continued.

YouGov director Anthony Wells said the backlash against the social care plans was the likely cause of the Tories' latest slump.

'On the face of it, the latest numbers appear to suggest that the Conservatives have lost support in the wake of the Manchester atrocity. However, given the many big events of the past week, it is vital to put the latest figures in some chronological context,' he said.

'Our previous Sunday Times poll was carried out on Thursday and Friday last week. This was just after the Conservatives launched their manifesto but before the big weekend furore about the "dementia tax" and the subsequent change in policy, which took place on Monday.'

The pound dropped 0.6% against the dollar on the news to trade at $1.286. 'Any growth managed by sterling since April has largely been predicated on the assumption that the Conservatives would secure a landslide victory,' said Connor Campbell, financial analyst at Spreadex.

'That this presently doesn't seem to be the case has helped further erode confidence in the currency's current position.'

The pound's fall helped the FTSE 100 buck losses for other European markets, edging 10 points higher to 7,528. A weak pound tends to support the index, whose members rely on overseas markets for around three-quarters of their earnings.

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