- UK Manufacturing PMI beats estimates with 60.1 in August.
- Services PMI in the UK drops to 55.5 in August, a big miss.
- GBP/USD drops below 1.3650 on mixed UK PMIs.
The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) eased slightly to 60.1 in August versus 59.5 expected and 60.4 – July’s final reading.
Despite the upbeat reading, the gauge hit the lowest levels in five months.
Meanwhile, the Preliminary UK Services Business Activity Index for August fell sharply to 55.5 versus July’s final readout of 59.6 and 59.0 expected. The index reaches six-month lows.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the survey
“Although the PMI indicates that the economy continues to expand at a pace slightly above the pre-pandemic average, there are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter.”
"Despite COVID-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages.”
FX implications
Mixed UK Preliminary Manufacturing and Services PMIs cap the upside in the pound, keeping GBP/USD in a familiar range of around 1.3650.
The spot is currently trading at 1.3651, up 0.21% so far.