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British Services Buck Brexit

British Services Buck Brexit

The UK was given another post-referendum boost yesterday as UK data continued to outperform expectations; two leading investment banks upgraded their forecasts for economic growth. JP Morgan has revised its figure from 1.7% and is now expecting the UK economy to grow by 1.9% this year.

This has been off the back of continuing positive data as the Markit Services PMI for August soared through expectations of 50.0, printing at 52.9 – the sharpest upswing for 20 years in the markets. This resulted in the Pound trading higher against both the Dollar and the Euro to end the day at 1.3310 and 1.1936 respectively.

The Euro weakened by 0.2% versus the Pound during yesterday’s European trading session due to poor European data setting the tone for the single currency. The Eurozone Markit Services PMI for August printed at 52.8 which was 0.3 lower than the expectation of 53.1. The single currency fell further as Markit PMI composite data fell by 0.4, printing at 52.9 as the sharp downward revision in the European service sector continues.

Eurozone Retail Sales came in 1% above predictions at 2.9%, showing continuing spending in the Eurozone, but the data had little impact on the single currency.

The Dollar was restricted to narrow ranges yesterday as the US Labour Day public holiday meant that the markets were closed.

Data to watch: 10am EUR Gross Domestic Product (Q2). 3pm USD ISM Non-Manufacturing PMI (Aug).

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