The October reading of the UK Services PMI increased to 54.9, beating estimates of 54.6 while posting a strong increase from 53.5 previously where the PMI reading touched the lowest since April 2013. Combined with the manufacturing and construction PMIs, the October services PMI points to a robust increase which is likely to lead to stronger GDP growth in the fourth quarter. While the manufacturing and construction contributes to 14% and 6% of GDP respectively, the largest contribution comes from the services sector which amounts to 79% of GDP. In the third quarter, the preliminary estimate of UK’s GDP was seen to have expanded at 0.50%, falling below market expectations of 0.60% and down from 0.70% growth in the second quarter. EURGBP touched a new one-month low yesterday at 0.7061 as the single currency continues to remain weak on speculation of an ECB’s asset purchase expansion this December.
December Decision to be Data Dependent
Daily Analysis - 05/11/2015