The latest Services PMI provided further good news for the GBP this Monday. The figure which was keenly observed provided more hope for the UK economy reaching 52.9, comfortably above the projected 49.1. The services sector which provides roughly 80% of the UK’s GDP rebounded to growth territory in August following a poor results pre and post Brexit.
The figure which was attributed new business growth from new client generation, a higher level of exported services and the benefits of a weaker Pound.
Job creation also resumed following a disappointing July, however economist still predict that a bumpy road lies ahead and predict a general slowdown which will be compounded by ‘Brexit negotiations and uncertainty.
This week’s G20 provided an apt sounding board for post Brexit global concerns and future negotiations. The Japanese prime minister requested more clarity for Japanese owned businesses operating with in the UK. Whilst the US once again underlined that the UK would be at the back of the line when new trade deals.
If correct any potential slowdown, is expected to be in line with last month’s Bank of England statement and is anticipated to take hold in the second half of the year. Another potential cause for future instability could be divided opinion on the exit strategy with the UK conservative party.
Following the Morning announcement GBP rose to a near two months high against the US Dollar peaking at 1.3370. GBP/EUR also fared well following the announcement touching 1.1971.
The next important batches of data for the UK will be announced on Wednesday the 7th of September and include, the Halifax House price Index and Monthly manufacturing production.
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