Euro Rallies Against Pound as UK Business Activity Disappoints

The Euro (EUR) surged against the British Pound (GBP) on Wednesday as mixed UK Purchasing Managers' Index (PMI) figures revealed disappointing business activity in September. The EUR/GBP pair reached session highs at 0.8590, nearing the top of its monthly range around 0.8600.

The Preliminary UK S&P Global PMI data showed manufacturing activity improved to 52.0 in September from 51.7 in August, but services activity slowed down to 51.7 from 52.5 in the previous month, below market consensus of 52.0. This pushed the Composite Index down to 51.7 in September.

The report highlighted accelerated input price inflation for the second consecutive month, reaching its highest level since June, and underscored survey respondents' complaints about increased energy, fuel, and raw material costs. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated that 'September is seeing a worrying combination of disappointingly sluggish economic growth and intensifying inflationary pressures.'

On the other hand, Eurozone PMIs were more supportive. The Preliminary Eurozone Services PMI improved to 53.0 in September, beating expectations of 51.7, while Manufacturing PMI remained steady at 52.7.