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UK Services PMI rebounded to 52.9

Monday, Sep 05 2016

The UK service sector returned to growth in August, according to PMI survey data from IHS Markit and CIPS. Following abrupt contractions in output and new business in July linked to disruption related to the outcome of the EU referendum, the latest data signalled a return to growth as companies reported that uncertainty had abated somewhat. Moreover, the forward-looking business expectations index recovered most of the ground lost in July when confidence took a knock from the Brexit vote amid political and economic uncertainty, albeit remaining weak by historical standards.

The latest data also signalled rising inflationary pressure linked to the weak pound. The Business Activity Index rebounded to 52.9 in August, from 47.4 in July, signalling a rise in UK services output. The month-on-month gain in the index, at 5.5 points, was the largest observed over the 20-year survey history, following a record drop of 4.9 points in July. The rate of expansion in the latest period was the fastest since May, but weaker than the long-run survey average.

 

Sterling is currently being traded around 1.33 handle. Pair is likely to find support around 1.3250 area and resistance above 1.3350 level.

More in this category: « Growth in Spanish services business activity picks up Australian Current Account deficit at $15.5 billion »

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