Belfast Telegraph

Pound down further as opinion poll shows Labour chipping away Tory lead

The pound continued its slide against the dollar and euro on Friday after a shock opinion poll showed that Labour continues to eat into Theresa May's lead.

Sterling extended losses against the greenback, falling 0.5% to 1.28 US dollars having risen above 1.30 just days earlier.

Against the euro, the pound slumped 0.4% to 1.14 euro.

The Conservatives' advantage over Labour has narrowed to just five points in the first opinion poll taken since Monday night's suicide bomb attack in Manchester.

A YouGov survey put the Conservatives down a point on the previous week on 43% and Labour up three on 38%, with Liberal Democrats up one on 10% and Ukip up one on 4%.

Craig Erlam, senior market analyst at Oanda, said: "Sterling fell again overnight after a poll showed the gap between Theresa May's Conservatives and Jeremy Corbyn's Labour party has narrowed again.

"Coming on the back of losses yesterday, it's turning into a rotten end to the week for the pound. What's more, with it having broken below 1.29 against the dollar overnight, it could be facing further misery in the near-term."

The pound has plummeted since Britain voted to quit the European Union as confidence in the country's economic prowess has evaporated.

Yesterday, official figures showed that the economy suffered an even deeper slowdown at the start of the year as the services sector came under pressure and inflation dealt a blow to household spending.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.2% in the first quarter of 2017, revising down the figure from its initial estimate of 0.3%.

Mr Erlam added: "The pair (pound and dollar) had been grinding higher for the last month and while it did manage to briefly penetrate 1.30 on a few occasions, the moves were always lacking conviction which suggested markets weren't happy at these levels.

"The break of 1.29 may well be the trigger for a correction in the pair, with 1.28 and 1.2750 being notable levels below."