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Pound builds on gains after poll puts Tory lead at 12 points

Sterling has hit a session high after a new UK election poll showed the Conservatives holding a double-digit lead over the Labour party despite a recent stumble in popularity for prime minister Theresa May.

The latest ICM poll gives the Conservatives a 12-point lead – down 2 points in the last week – but still more than double the 5 points suggested by the likes of YouGov in recent days.

Labour polled at 33 per cent – no change over the last seven days – while the Liberal Democrats lost 1 point at 8 per cent.

The pound, which reversed a daily decline earlier this morning, accelerated its gains to trade 0.3 per cent higher against the dollar at $1.2877.

Sterling’s impressive rally since Ms May called the snap election has hit a stumbling block over the past week as the Tories’ poll lead dropped from a high of 20 points.

Analysts at JPMorgan think a Tory majority of any size will not hold many upsides for the pound, as investors have largely priced in the probability of a Conservative government to lead the UK through its exit talks.

However, the investment bank thinks the narrow possibility of a hung parliament will be supportive for the pound should it lead to a centre-left coalition that could pursue a more conciliatory Brexit deal.