British Services PMI exceeded expectations and rose to 54 points, indicating stronger growth. Will Britain escape a recession?
GBP/USD is still under the weight of European troubles and doesn’t really move up on this good figure.
Earlier in the week, the British manufacturing sector managed to slow its contraction and rise nicely. Also Britain’s construction sector has improved with stronger growth.
GBP/USD dropped earlier below the 1.56 line, and stopped at around 1.5560. For more on the pound, see the GBP/USD forecast.
The British MPC isn’t expected to act on the QE program in its rate meeting next week. The current expansion of the Asset Purchase Facility will likely end only at the of the month and with these positive recent signs, further monetary loosening might wait longer.
Also the British housing sector has stabilized of late, with prices bottoming out and even rising. In the currency markets, Britain hasn’t decoupled from Europe, contrary to the political split.
