Pound sterling stabilises after dropping in the wake of London attack

Sterling slipped around 0.5 per cent against the dollar overnight into Monday but later steadied

The pound has been buffeted by narrowing opinion polls in recent weeks (PA)

The pound steadied after briefly falling in the aftermath of Saturday’s terror attack in London that left seven people dead and dozens more injured.

Sterling slipped around 0.5 per cent against the dollar overnight into Monday, before stabilising and hovering around $1.2894 late on Monday. It fluctuated against the euro.

The attack was the third in the UK in less than three months and comes just days before the 8 June general election.

:: Follow latest live updates after deadly London attack

The currency has been buffeted by narrowing opinion polls in recent weeks and over the weekend a Survation poll for The Mail on Sunday showed that the Conservatives’ lead over Labour had been cut to just one point.

That represents a six point fall in support for the Tories since their last poll two weeks ago, while Labour are up five points.

The Liberal Democrats are unchanged on eight per cent, while Ukip are up one on five per cent, according to the poll.

But that poll contrasts sharply with one by ComRes published the same day, which suggest the Conservatives still have a healthy 12 point advantage over Labour.

Investors have said that the prospect of a hung parliament would create immense uncertainty for financial markets ahead of Brexit negotiations officially starting.

Sterling remains well over 10 per cent lower against the dollar since last June’s referendum, but had rallied by over 4.5 per cent in March and April before falling 0.5 per cent in May.