- UK Final Services PMI downwardly revised to 60.5 in February.
- GBP/USD remains below 1.3400 on the downbeat UK data.
- Eyes on US Jobless Claims, ISM Services PMI ahead of Russia-Ukraine peace talks.
The UK services sector activity expanded less than expected in February, 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 60.5 in February versus 60.8 expected and a 60.8 – last month’s flash reading.
Key points
Sharper increases in activity and new orders as Omicron wave fades.
Output price inflation hits fresh record.
Fastest rise in employment in four months.
Andrew Harker, Economics Director at IHS Markit, which compiles the survey
“The ebbing of the Omicron wave of the COVID-19 pandemic contributed to a rebound in growth in the UK service sector in February, with rates of expansion in activity and new business up sharply. With manufacturing also seeing growth quicken, the UK economy looks to have been expanding sharply midway through the first quarter of the year.”
"Inflationary pressures remained acute, however, with selling prices rising at a fresh record pace for the second month running. This pass-through of costs to customers will very likely prompt the Bank of England to hike interest rates again at the next MPC meeting in March.”
FX implications
GBP/USD is flirting with daily lows near 1.3370, with the downside exacerbated by the poor UK data. The spot is down 0.21% on the day.
