47 Mins Ago
Sterling rises after UK business activity beats expectations
The British pound gained Thursday after U.K. business activity defied expectations and returned to growth in November.
The preliminary purchasing managers’ index from S&P Global/CIPS, a measurement of services and manufacturing, put activity at 50.1 — ahead of the 50 mark separating growth from contraction, and ahead of the 48.7 forecast in a Reuters poll of economists.
Sterling was up 0.5% against the U.S. dollar at 10 a.m. in London at $1.256. It was 0.2% higher against the euro at 1.149.
“The UK economy found its feet again in November as the service sector arrested a three-month sequence of decline and manufacturers began to report less severe cutbacks to production schedules,” said Tim Moore, economics director at S&P Global Market Intelligence.
“Relief at the pause in interest rate hikes and a clear slowdown in headline measures of inflation are helping to support business activity, although the latest survey data merely suggests broadly flat UK GDP in the final quarter of 2023.”
The moves also come after the U.K. government made a series of fiscal announcements, including cuts to personal and business taxes.
The independent Office for Budget Responsibility on Wednesday sharply downgraded its U.K. growth forecasts and raised its inflation projections.
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European markets: Here are the opening calls
European markets are expected to open in mixed territory Thursday.
The U.K.’s FTSE 100 index is expected to open 11 points higher at 7,467, Germany’s DAX down 13 points at 15,949, France’s CAC down 1 point at 7,261 and Italy’s FTSE MIB down 9 points at 29,178, according to data from IG.
Preliminary purchasing managers’ index data from the euro zone for November is due.
— Holly Ellyatt
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