UK service data beats forecasts

David Cheetham XTB UK

This morning’s better than expected release comes as a welcome surprise for the UK economy with the latest survey on the service sector seeing its index rise higher after the disappointment of the manufacturing and construction equivalents in recent days. The reading itself of 54.3 is up on the 53.5 seen last time out and given that the consensus forecast amongst economists was for a rise to 53.9 this release is a clear beat.

This faster pace of growth for the sector in August keeps the economy on track for growth of 0.4% in the third quarter, but it should be pointed out that increasingly pessimistic business expectations do take the shine off of it a little.

The pound has attempted to move of its lowest level in more than a fortnight against the US dollar after sinking back near the $1.28 handle earlier this morning. The lowest level in over a year of 1.2662 remains around 1% away and but sterling bulls will be hopeful that this positive news can see the market gain traction and recoup some of the losses seen so far this week.

Britain would now vote remain

Brexit continues to dominate the headlines today with a recent poll showing that Britain would now vote to remain in the EU grabbing the attention. According to the survey another ballot would see Britons vote 59-41 to stay in the EU if given the option which marks the highest level of support for remain since the 2016 referendum. Furthermore this would represent a pretty dramatic shift from the 52-48 result seen just over 2 years ago and it appears the public opinion may have shifted due to the botched process seen since that fateful day in June 2016.

The findings were published in an academic-led report by research bodies NatCen and The UK in a Changing Europe and while they appear to be pretty conclusive it should be pointed out that opinion polls around the time of the vote were, with the benefit of hindsight, found to be pretty inaccurate. There remains many hurdles to jump before a 2nd referendum could be held, but these latest findings are the clearest sign yet that it would yield a different outcome and if support for another vote grows significantly in the coming months then it may well become a very real possibility.

Author

David Cheetham

XTB UK

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