Forex Pros – Service sector activity in the U.K. rose unexpectedly in June, industry data showed on Tuesday.
In a report, market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index eased up to 53.9 in June from 53.8 in May.
Analysts had expected the index to decline to 53.5 in June.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
U.K. service sector growth was sustained during June at a solid pace as volumes of incoming new business continued to rise.
However, rates of expansion remained below trend, a factor that led to another month of broad employment stagnation.
Moreover, confidence amongst service providers weakened markedly to the lowest since last October as panelists provided a generally downbeat assessment of current economic conditions.
Commenting on the report, Chris Williamson, chief economist at Markit said, “The combination of subdued growth of business activity and declining price pressures is likely to further encourage the Bank of England to hold off on raising interest rates until the recovery looks more sustainable.”
Following the release of that data, the pound was down against the U.S. dollar, with GBP/USD shedding 0.14% to trade at 1.6060.
Meanwhile, European stock markets were mixed. The EURO STOXX 50 dropped 0.22%, France’s CAC 40 dipped 0.25%, the FTSE 100 eased up 0.15%, while Germany’s DAX gained 0.12%.
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