One shock analysis reckons the Tories could not only fail to add meaningfully to their majority, but lose it altogether. The currency and financial markets matter in all elections, but given this one is happening during Brexit, any uncertainty and instability is amplified.
The findings again weakened sterling 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.
When the YouGov projection was first published by The Times on Tuesday evening, the pound fell sharply in response, although it recovered slightly by Wednesday morning.
Using new constituency-by-constituency modelling, the projection by pollsters YouGov said the party could lose 20 seats to end up with 310.
Labour are on 39 per cent from 36 per cent, which is the narrowest gap YouGov polling has had in the race to date. YouGov’s election model was based on voting intention figures which gave May a lead of just three percentage points, YouGov said.
But this time around the percentage of voters potentially switching their loyalty between Labour and Conservative is around 20%, according to intelligence being examined inside Tory party headquarters.
So the markets prefer a Conservative win? There’s still a big difference between winning a campaign and winning an election though.
The Prime Minister was asked if she would resign if the Conservatives lost their majority next week.
‘This makes the outcome even harder to predict, and makes it difficult to price in the potential impact from the election result ahead of time. If it’s actually about personalities, then Theresa May is in more trouble than the polls suggest.
The question then of how this affects the European Union negotiations is firmly a discussion point and tactically any moves into £1.3200 to £1.3200 would present a good selling opportunity.
The pound has reversed almost half of its 4pc gain since Ms May called the election. If GBP rallies, this could become a headwind for the FTSE 100.
“The Conservatives have maintained the lead in polls, including yesterday’s ICM poll, and are the favourites to win”. 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.
However, YouGov also notes that this model correctly predicted the result of the 2016 EU Referendum.
The i carries the headline “Ambush”, saying that other parties targeted the Home Secretary on her party’s campaign, while the Mirror opts for “Leaderless …” It’s now much more plausible that Labour might be elected, which doesn’t appear to be spooking traders as much as some thought it might.
If the poll is accurate and the swing were uniform across the country, the Tories would be 17 seats short of an overall majority.
So it remains likely that the Tories would lead any government, albeit with a reduced majority and probably in coalition, limiting the party’s freedom in Brexit talks.