GBP Sinks Amid Weaker UK Business Surveys and Services Inflation

The British Pound Sterling has experienced a decline against both the Euro and US Dollar following weaker UK business surveys. The PMI flash composite fell to 51.7 from 52.5, below expectations of 52.0, with services recording the same reading.

Manufacturing's headline index improved to 52.0, but its output component weakened. Pantheon Macroeconomics sees enough economic resilience for the Bank of England to respond to rising prices, stating 'It's a hawkish combination for the MPC and keeps a November rate hike on track.'

The services selling-price balance jumped to 58.2 from 56.9, its highest since May. Pantheon notes this signals underlying services inflation above 4.5% on a three-month annualised basis.