Pound Sterling rebounds on upbeat UK Retail Sales, flash PMI data
The Pound Sterling (GBP) attracts bids against its major currency peers on Friday due to upbeat flash S&P Global Purchasing Managers’ Index (PMI) data for October and surprisingly strong Retail Sales data for September.
According to the S&P Global report, overall private sector business activity expanded at a stronger-than-expected pace. The Composite PMI rose to 51.1 in October, faster than estimates of 50.6 and the prior reading of 50.1.
Higher-than-projected growth in the service sector activity and an improvement in the Manufacturing PMI contributed to the upbeat Composite PMI. The Services PMI came in at 51.1, higher than estimates of 51.0 and the former reading of 50.8. Meanwhile, the Manufacturing PMI has increased to 49.6 from expectations of 46.6 and the September reading of 46.2. The manufacturing activity has continued to contract, but at a slower pace. A figure below the 50.0 threshold is considered a contraction in the business activity.
Earlier in the day, the Office for National Statistics (ONS) reported that Retail Sales, a key measure of consumer spending, unexpectedly rose by 0.5% on a monthly basis, slower than 0.6% in August, which was revised higher from 0.5%. Still, data beat by far economists' expectations of a 0.2% decline.
On an annualized basis, the consumer spending measure grew at a robust pace of 1.5% against the market consensus of 0.6% and the prior reading of 0.7%.
Signs of upbeat Retail Sales figures and strong PMIs are likely to offer some relief to Bank of England (BoE) officials who became concerned over the UK economic outlook. On Thursday, BoE policymaker Swati Dhingra warned, in her prepared remarks at a conference organized by Ireland’s central bank, that United States (US) tariffs could put downward pressure on inflation and economic growth. “Tariffs mean lower overall growth, and some downward pressure on prices in the medium term,” Dhingra said.
Source: fxstreet
