- UK Manufacturing PMI misses estimates with 56.3 in September.
- Services PMI in the UK drops to 54.6 in Sept, a miss.
- GBP/USD holds above 1.3650 on poor UK PMIs.
The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 56.3 in September versus 59.0 expected and 60.3 – August’s final reading.
The gauge fell to the lowest levels in seven months.
Meanwhile, the Preliminary UK Services Business Activity Index for September eased 54.6 to versus August’s final readout of 55.0 and 55.0 expected. The index also reaches seven-month lows.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the survey
"The September PMI data will add to worries that the UK economy is heading towards a bout of ‘stagflation’, with growth continuing to trend lower while prices surge ever higher.“
"While there are clear signs that demand is cooling since peaking in the second quarter, the survey also points to the business activity being increasingly constrained by shortages of materials and labor, most notably in the manufacturing sector but also in some services firms. A lack of staff and components were especially widely cited as causing falls in output within the food, drink and vehicle manufacturing sectors.”
FX implications
Downbeat UK Preliminary Manufacturing and Services PMIs failed to deter the GBP bulls, keeping the GBP/USD bounce above 1.3650.
The spot is currently trading at 1.3665, up 0.27% so far.
