- Chris Williamson, Markit's chief economist
While both construction and manufacturing PMI sent mixed signals, they also gave a clear indication that the U.K. economic recovery remains on track. Even so, the EUR/GBP pair was unable to fall below 0.8250 due to the upcoming ECB's meeting, while Ukraine crisis fuelled demand for safe-haven currencies, including a demand for the greenback, pushing the cable to 1.6641.
At the same time, services sector that accounts for the majority of overall economic activity, expanded for 14th consecutive month in February on the back of stronger confidence. On Wednesday, Markit Economics showed a gauge of activity in the services sector stood at 58.2 last month from 58.3 a month earlier, coming in line with analysts' forecasts. The key sector maintained its lengthening trend of stable and consistent growth, all there are signs that the tendency will continue, as business confidence stands at a four-and-a-half year high. And while consumer mood and credit conditions are all benefitting to a further sector's development, productivity and real earnings still remain weak. Therefore, first quarter's growth is likely to slow, and pickup during the year.
Nevertheless, strong services PMI pushed the Pound 0.14% higher against the greenback to 1.6689, as investors consider it as another part of the puzzle for the BoE to start raising interest rates soon.
© Dukascopy Bank SA