- Dean Turner, UBS Wealth Management
According to the latest data released by Markit Economics, Britain's services sector rebounded notably in August, showing a strong recovery from the post-Brexit plunge recorded during the previous month. Markit's Purchasing Managers Index for the services sector added 5.5 points or rising from a four-year low of 47.4 in July to 52.9 in August, easily beating expectations for a 50 reading. Moreover, the increase of 5.5 points on a monthly period was the largest jump recorded over the 20-year history of the survey and followed a record drop of 4.9 points in July. It is worth to point out that PMI report followed news on Thursday of a bigger-than-expected rebound, to a 10-month high, of the Markit manufacturing-sector PMI for the UK and like the Thursday report, it boosted the pound. The Sterling soared to a seven-week high against the dollar after data showed the UK services sector rebounded sharply in August, following a slump during the previous months. The UK currency increased 0.35% against the dollar to 1.3340 mark.
Nevertheless, overall economic growth is expecting to slow sharply, keeping alive the possibility of another Bank of England rate cut before the end of the year.
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