Pound slips as further poll shows Labour closing gap on Tories

With less than a week to go before the UK general election, opinion polls continued to show Labour gaining ground and the Conservative party's share of the vote shrinking.

An Ipsos Mori poll for the Evening Standard showed the Conservatives at 45%, down from 49%, with Labout at 40%, up from 34% previously.

The newspaper said women and middle-aged voters were punishing Prime Minister Theresa May following controversies over the “dementia tax” and school meals, with a significant shifts to Jeremy Corbyn's party among women and the 35-54 age group.

Among voters aged over 55, satisfaction with May has dropped from 70 to 57.

A daily polling update from YouGov showed the Tory party back up to a four-point lead on an unmoved 42% to Labour's 38%, down from 39% the previous day.

The YouGov model would give the ruling Conservatives 279-346 seats out of 650, with 231-286 for Labour, with some refinement giving a split of 313 to blue corner and 257 to the red, and 10 to the Liberal Democrats.

The pound slunk down close to two-month lows against the euro at €0.87282, while it was down 0.24% versus the dollar at 1.2851.

On Wednesday markets had a major wobble following the publication of a YouGov estimate which suggested that the Tory party would lose 20 seats and fall short of a parliamentary majority, leading to a hung parliament.

Although as election day nears, the Tory lead in the polls has continued to narrow, economist Andrew Goodwin at Oxford Economics said the party started with such a large lead that "anything other than an enhanced majority would be a major surprise and there remains a good chance that the majority will approach three figures".

The peculiarities of the UK’s ‘first past the post’ electoral system means it is difficult to predict election results based upon opinion polls, Goodwin said, but even allowing for these uncertainties, he felt YouGov's constituency-by-constituency prediction looked to be an extreme outlier.

"We regularly monitor the outputs of four electoral models – Electoral Calculus, Elections Etc, Election Forecast and Nigel Marriott – which use data from opinion polls to forecast the number of seats that each party will win. All four continue to point to the Conservatives extending their majority to 80-90 seats, even after making allowance for the recent narrowing of the polls (previously the models had been indicating majorities stretching well into three figures)."

After the televised debate this week, spread betting firm IG said its clients were betting on a Conservative majority of 106 seats.

IG's general election seats market allows traders to buy and sell the total amount of seats each party could win.