The Business Activity Index remained above the no-change mark of 50.0 in September, at 52.6, signalling growth of UK services output. Down slightly from 52.9 in August, the latest figure Markit / CIPS UK Services PMI indicated a further moderate rate of expansion at the end of the third quarter, following a contraction in July in the wake of the EU referendum. The rate of expansion in the latest period was weak in the context of historical data, however, with the Indeks below its long-run level of 55.1. The Indeks averaged 50.9 over Q3 as a whole, the lowest since Q4 2012.
The survey data signalled a strengthening trend in new business inflows, as companies reported new opportunities and customer enquiries, rising demand from overseas clients linked to the weak pound sterling and client confidence recovering after the initial Brexit vote shock. New business rose at the fastest pace since February, albeit with the rate of increase remaining below the long-run survey average.
Sterling is currently being traded around 1.2720 level. Pair is likely to find support around 1.2650 and resistance above 1.2770 area.
