- UK Final Services PMI revised down to 58.8 in August.
- GBP/USD is off the lows but remains below 1.3300.
- Broad USD rebound remains intact, focus shifts to US data.
The UK services sector activity expanded less-than-expected in August, the final report from IHS Markit confirmed this Thursday.
The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised lower to 58.8 in August versus 60.1 expected and a 60.1 – August’s first reading.
Key points
Business activity expands for the second month in a row.
Rising domestic demand leads to faster growth of new work.
Rate of job shedding accelerates in August.
Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey
“A further surge in service sector business activity in August adds to signs that the economy is enjoying a mini-boom as business re-opens after the lockdowns, but the concern is that the rebound will fade as quickly as it appeared.”
“The current expansion is built on something of a false reality, with the economy temporarily supported by measures including the furlough and Eat Out to Help Out schemes. These props are being removed.”
FX implications
The GBP bulls shrugs-off the downward revision to the UK Services PMI for August, as GBP/USD bounces-off 1.3277 lows to now trade near 1.3293, still down 0.36% on the day.
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