UK Preliminary Services PMI jumps to 60.8 in February vs. 55.5 expected

• UK Manufacturing PMI steadies at 57.3 in February, beats estimates.
• Services PMI in the UK comes in at 60.8 in February, a big beat.
• GBP/USD holds gains near 1.3635 on upbeat UK Preliminary PMIs.

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) steadies at 57.3 in February versus 57.2 expected and 57.3 – January’s final reading.

Meanwhile, the Preliminary UK Services Business Activity Index for February rose sharply to eight-month peaks, arriving at 60.8 versus January’s final readout of 54.1 and 55.5 expected.

Chris Williamson, Chief Business Economist at IHS Markit, commented on the survey

“The latest PMI surveys indicate a resurgent economy in February, as business activity leaped as COVID-19 containment measures were relaxed.”

"With the PMI’s gauge of output growth accelerating markedly in February and cost pressures intensifying to the second-highest on record, the odds of an increasingly aggressive policy tightening have shortened, with a third back-to-back rate rise looking increasingly inevitable in March.”

FX implications

Mixed UK Preliminary Manufacturing and Services PMIs keep the GBP bulls underpinned, as the GBP/USD pair hovers near-daily highs of 1.3639.

The spot is trading at 1.3635, adding 0.34% on a daily basis, at the press time.