Sterling drops on fears Tories could fail to win an outright majority
- Author: Zachary Reyes Jun 01, 2017,
Jun 01, 2017, 2:24
The pound is falling against the euro and dollar on Wednesday after a new poll suggested that next week's election could return a hung parliament.
A collective "poll of polls" by the Press Association, based on a seven-day rolling average of all published polls, places the Tories on 44%, Labour 35%, the Liberal Democrats on 8%, Ukip on 5% and the Green Party on 2%.
Detailed Brexit negotiations between Britain and the European Union are set to start 11 days after the election, so there will be intense pressure to form a government by then. But it is even more unusual for a company to suddenly employ a new polling model 10 days before a British general election.
The shocking scenario could leave Theresa May's hand weakened ahead of Brexit negotiations - or see her ousted by an opposing coalition government.
And while the polls disagree somewhat about just how close the election now is - the estimates have ranged from five points to 14 - every single pollster has identified a substantial narrowing of the Conservative lead.
"The movement in the polls over this campaign is bigger than in any election I've covered since 1945", veteran poll watcher David Butler said on Twitter.
This YouGov projection is one of the first polls to provide such a result.
The model is based on 50,000 interviews over a week, with voters from a panel brought together by YouGov.
YouGov acknowledged that its predictions were controversial and suggested big swings in the usual voting patterns for many Britons.
The pound wobbled overnight after a shock projection forecast that May - who had been on course for a landslide just a few weeks ago - could actually lose her majority in the House of Commons after next week's vote.
The pound fell below $1.28 Wednesday, its lowest level in more than a month, after pollster YouGov suggested Britain could be headed for a hung Parliament in which no party has an overall majority. "Recently we've been relatively agnostic about sterling, but have now chose to underweight the currency for the next couple of weeks, in case the depreciation accelerates".
"You really can't run a portfolio around poll results", said Eric Moore, a portfolio manager at Miton Group, who added he had not changed his portfolio much and remained wary of United Kingdom consumer stocks.
He warned that schools and state healthcare in England would be put at risk if May remains in office.