Need confirmation, My ex manifold is leaking above the O2 sensor, will this affect the the O2 readings and in turn cause it to over fuel.

Generally, any leak in the manifold will affect emissions in some way - it is usually enough to fail MOT (ask me how I know this )

Yes is the short answer.
It will effect the way the O2 sensor calibrates, it will also destroy the sensor due to overheating, if your car is ECU controlled it will over fuel or go into limp home mode and possibly destroy the cat.
Fix it

Holts "Firegum" or equivalent works wonders.

My exhaust manifold had a crack in it so i filler the crack with exhaust paste and its been there for a year now.

Trouble is the hole(s) are not accessable. I have bought another from a mx5 nut