UK Preliminary Services PMI returns to expansion with 50.5 in November

• UK Manufacturing PMI rose to 46.7 in November, above expectations of 45.0.
• Services PMI in the UK jumped to 50.5 in November, a big beat.
• GBP/USD rallied hard on strong UK business PMIs but quickly pared back gains.

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose to 46.7  in November versus the 45.0 expected and, 44.8 – October’s final print.

Meanwhile, the Preliminary UK Services Business Activity Index jumped to a four-month high of 50.5 in November, as against a 49.5 final print for October and the 49.5 market consensus.

Commenting on the flash PMI data, Tim Moore, Economics Director at S&P Global Market Intelligence said: “The UK economy found its feet again in November as the service sector arrested a three-month sequence of decline and manufacturers began to report less severe cutbacks to production schedules.”

“Relief at the pause in interest rate hikes and a clear slowdown in headline measures of inflation are helping to support business activity, although the latest survey data merely suggests broadly flat UK GDP in the final quarter of 2023,” Moore added.

FX implications

At the press time, GBP/USD is paring back gains to trade near 1.2540, having spiked to 1.2573 in a knee-jerk reaction to the upbeat UK data. The pair is up 0.42% on the day.