By Paul Sandle
LONDON (Reuters) - Prime Minister Theresa May's lead in the polls has fallen to 5 percentage points, a new low less than two weeks ahead of a June 8 election, but her personal rating recovered slightly in the days since the Manchester suicide bombing.
May called the snap election to strengthen her hand in negotiations on Britain's exit from the European Union and to win more time to deal with the impact of the divorce.
If she does not handsomely beat the 12-seat majority her predecessor David Cameron won in 2015, her electoral gamble will have failed. When she called the election, polls showed she was as much as 23 percentage points ahead.
In the first opinion poll to be published since Monday's suicide bombing in Manchester, the lead of May's Conservatives dropped to 5 percentage points from 9 points on Saturday and 18 points two weeks ago.
The Conservatives saw their support fall to 43 percent from 44 percent, while the opposition Labour Party increased support to 38 percent from 35 percent, the YouGov poll carried out on May 24-25 showed.
Such a level of support, if it was replicated across the country in a uniform way on June 8, would cut May's majority to two from the working majority of 17 she currently has, The Times newspaper, which commissioned the poll, said.
The pound fell over 0.5 percent on the day from its previous day's close to $1.2861 - its lowest level since May 12. <GBP=D3>
The data, however, showed a complicated picture with both the Manchester bombing and PM May's biggest U-turn of the campaign affecting her personal ratings.
May's campaign misfired when she was forced on Monday to backtrack on one of her core election pledges to make elderly people pay more for their social care, a policy dubbed the "dementia tax" by opponents.
The bombing on Monday evening, however, may have improved May's rating from a low earlier in the day when she appeared rattled as she backtracked on her social care policy.
Her personal rating improved from minus eight on Monday to plus one in the following days, while Labour leader Jeremy Corbin's personal rating slipped from minus 11 - his best position in the campaign - to minus 16, YouGov said.
Britain suspended campaigning after the attack on Monday night in Manchester. Corbyn will criticize May's police cuts and Britain's foreign policy on Friday.
YouGov's Anthony Wells said May and her party had been hurt by the fallout from the manifesto launch but said it was hard to determine the impact of the bombing on the election campaign.
"It has been a highly unusual few days in an election campaign, arguably unlike any other in history," Wells said.
YouGov surveyed 2,052 people for the poll.
(Reporting by Paul Sandle and Kate Holton; editing by Guy Faulconbridge)