UK Preliminary Services PMI steadies at 54.3 in February vs. 54.1 expected

• UK Manufacturing PMI rose to 47.1 in February, missing estimates of 47.5.
• Services PMI in the UK held steady at 54.3 in February, a positive surprise.
• GBP/USD holds gains near 1.2700 after mixed UK business PMIs.

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) improved slightly from 47.0 in January to 47.1 in February, below the market consensus of 47.5.

Meanwhile, the Preliminary UK Services Business Activity Index stayed unchanged at 54.3 in February, beating the consensus forecast of 54.1.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “UK economic growth has accelerated in February, with the early PMI survey data pointing to the largest rise in business activity for nine months. This is by no means a one-off improvement, as faster growth has now been recorded for four straight months after a brief spell of decline late last year.”

“The survey data point to the economy growing at a quarterly rate of 0.2-3% in the first quarter of 2024, allaying fears that last year's downturn will have spilled over into 2024 and suggesting that the UK’s ‘recession’ is already over,” Chris added.

FX implications

GBP/USD is consolidating the latest uptick to 1.2710 following the mixed UK PMI data. The pair is currently trading at 1.2692, adding 0.46% so far.