- UK Manufacturing PMI beats estimates with 53.6 in July.
- Services PMI in the UK rises to 56.6 in July.
- GBP/USD keeps range around 1.2740 on the data release.
The UK manufacturing and services sector activities quickened its pace of expansion in July, the preliminary report from IHS Markit showed this Friday.
The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to a 16-month high of 53.6 in July versus 52.0 expected and 50.1 – June’s final reading.
Meanwhile, the Flash UK Services Business Activity Index for July hit 60-month highs of 56.6 versus June’s final readout of 47.1 and 51.1 expected.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the survey
“The UK economy started the third quarter on a strong footing as business continued to reopen doors after the COVID-19 lockdown. The surge in business activity in July will fuel expectations that the economy will return to growth in the third quarter after having suffered the sharpest contraction in modern history during the second quarter.”
“However, while the recession looks to have been brief, the scars are likely to be deep. Even with the July rebound there’s a long way to go before the output lost to the pandemic is regained and, while businesses grew more optimistic about the year ahead, a V-shaped recovery is by no means assured. “New orders showed only a relatively small rise in July.”
FX implications
The above forecasts UK Preliminary Manufacturing and Services PMI fails to inspire the GBP bulls, as GBP/USD trades modestly flat at 1.2735. Markets also shrugged-off robust UK Retail Sales data.
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