Pound Strengthens on Improved PMIs and Retail Sales

The British Pound has seen a significant boost following the release of PMI and retail sales data. The UK Composite PMI rose to 52.1 in July, marking its first expansion since April. Manufacturing led the recovery, with output growth and new orders recording their strongest increase since February 2022.

The Services PMI also increased to 51.8, returning to growth for the first time since April as consumer-facing sectors and hospitality activity improved. Input cost inflation eased to a five-month low, while business confidence climbed to its strongest level since February.

Retail sales rose 1.0% month-on-month in June, beating market expectations of a decline. The strong number was primarily driven by summer shopping amidst the heatwave and earlier timing for online discounting.