The UK PMI manufacturing index was lower than expected with a decline to 54.6 for February from a revised 55.7 the previous month.
The index remained above the long-term average and overall confidence remained firm with further gains in employment while inflation pressures remained strong. The net consumer lending, money supply and mortgage approvals releases were all stronger than expected, but Sterling came under renewed selling after the PMI data with a retreat to below 1.2350.
Wider US strength subsequently pushed the pair to 6-week lows below the 1.2300 level while the Euro strengthened to 0.8580. The government lost an Article 50 Amendment vote in the House of Lords over guaranteeing the rights of EU citizens in the UK. Although there will be expectations that the vote will be over-ruled in the House of Commons, there was some negative impact on Sterling sentiment and the UK currency remained firmly on the defensive on Thursday.
UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]
British Pound Two days after the Autumn Budget Statement, the Pound is hanging in there and is looking firm. Why? Despite some attempts to talk it up on the grounds of the economy not in fact contracting, but merely marking time, the real reason is that while not being shouted from the rooftops, but definitely […]
UK: We Will Cut Taxes This morning will demonstrate that it is worth listening carefully when politicians make promises. In this case it is the word “will”, because with the economic tank almost completely dry, while he is a recent convert to the idea of cutting taxes, Chancellor Hunt has limited scope to do anything […]