"The UK economic recovery moved up a gear again in October, with the PMIs indicating record growth of output and employment. The all-sector PMI hit an all-time high of 61.5 in October, up from 60.2 in September."
- Chris Williamson, chief economist at survey compilers Markit
The Pound soared against the Euro and U.S. Dollar after a fresh release of services PMI, showing activity accelerated at the fastest pace in 16 years last month, suggesting the U.K. is pulling away from the rest of Europe. The Sterling advanced 0.66% versus the shared currency to 0.8415, while the cable increased 0.50%. A report from Markit Economics showed a measure of activity in the key services sector, as it accounts about 78% of economic activity, increased to 62.5 in October from 60.3 a month earlier, outpacing analysts' predictions for a 60.4 reading. Services sector was the largest upward mover of the country's GDP in the third quarter, rising through the quarter by 0.7%. Moreover, the output is currently slightly above the pre-recession peak in Q1 2008.
All other pillars of the economy like manufacturing and construction sectors, posted solid growth as well, reflecting a pickup in economic growth. While the neighbouring Eurozone is still facing significant problems and struggling to gain the momentum, the U.K. outlook is getting brighter, prompting the Bank of England to raise its own growth outlook next week. On the back of solid fundamental data, the European Commission has also predicted a 2.2% growth for the U.K. in 2014, twice the pace of the Eurozone and significantly higher than Germany and France.
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