May's lead falls to 3 percentage points

Andrew Belshaw, head of investment management at Legg Mason-affiliate Western Asset Management, said: "A smaller Conservative majority or even hung parliament would likely lead to currency weakness due to an even more uncertain path for Brexit negotiations".

'At this late stage of the United Kingdom election campaign, the pollsters are more dividend on the size of the Conservative party's lead that at any other time during the election, ' she said.

But if she fails to beat the 12-seat majority her predecessor David Cameron won in 2015, her electoral gamble will have failed and her authority will be seriously undermined.

A later poll, a separate regular survey carried out by YouGov for Thursday's Times newspaper, showed May's Conservative Party just three percentage points ahead of the Labour opposition, which has been eating into her lead since the start of the campaign.

The findings again weakened sterling GBP=D4 which had earlier fallen nearly a cent against the USA dollar on the YouGov model before rising on a Kantar poll which showed May's lead had increased to 10 percentage points.

That would have uncertain consequences for Britain's $2.5 trillion economy, and future government policy on everything from government spending and corporate taxation to bond issuance.

The weak pound helped lift the FTSE 100 35 points, or 0.5%, to 7,555 with technology and industrial stocks providing the upward momentum.

The race has narrowed from what polls had indicated would be a shoo-in huge majority for May to a much tighter contest in which she might even fall short of a majority, an outcome that would spark political chaos days before Britain begins negotiations on exiting the EU.

YouGov said May was still the most favoured choice for prime minister, though her 43 percent rating is the lowest it has ever been.

Corbyn, a 68-year-old peace campaigner, has been pulling in big crowds at rallies across the country despite warnings from opponents in his own party that he is leading Labour to the worst defeat in its history.

Mr Cooke said: "The more people see of Jeremy Corbyn, the more they appreciate what he is trying to do, the wheels seem to be coming off the Tory wagon".

May was taunted by other party leaders for not attending a televised debate with them.

However, if the latest polls are wrong - and they have previously underestimated Conservative support - and May wins a sizeable victory, she will axe current Chancellor of the Exchequer Philip Hammond and replace him with interior minister Amber Rudd, the Daily Telegraph reported.

George Saravelos at Deutsche Bank said: "If [Theresa] May is unable to deliver a substantially increased majority, her flexibility to negotiate will not have improved".

"Her resolve on Brexit is not in doubt; but her ability to deliver the best deal for Britain in terms of the closest possible relationship with the European Union is worryingly unclear", it said.

  • Leroy Wright