Pound climbs as UK service sector reports growth
Liam Sheasby, News Editor
4 Jul 2018, 2:05 p.m.
The latest IHS Markit/CIPS survey of the UK services sector has shown an increase in growth from 54.0 points in May to 55.1 in June.
Anything over 50 points qualifies as expansion, and the news caused a minor jump in value for Sterling, with a 0.14% value rise against the Dollar to $1.3212 and a 0.3% rise against the Euro to €1.1350.
The improved growth is the fastest expansion for the UK services industry since October last year. In a press release from IHS Markit, Chris Williamson, Chief Business Economist, said: “It remains encouraging yet also surprising that current business activity continues to show such resilience amid relatively moribund confidence regarding the year ahead outlook. The survey once again highlights how the business outlook remains clouded by widespread concerns about the impact of Brexit uncertainty in particular.”
The UK services sector is almost 80% of the UK’s GDP, so improvement is welcome – especially in the face of Brexit and the ongoing US/China/EU trade dispute.
The Markit/CIPS also surveyed the construction sector and reported growth there too, and the combination will add to the pressure on the Bank of England to increase the interest rate next month.