UK Final Services PMI misses estimates with 53.2 in Feb, GBP/USD stays below 1.28

The UK services sector activity expanded less-than-expected in the month of February, the final report from IHS Markit showed this Wednesday. 

The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised lower to 53.2 in February versus 53.3 expected and a 53.3 – February’s first reading.

Key points

Weaker rises in business activity and new work.

Job creation softens.

Prices charged inflation hits a 27-month high.

Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey

“The post-election rebound in service sector growth lost some of its bounce in February, in part due to coronavirus related disruptions to sectors such as travel and tourism but continued to expand at an encouragingly robust pace.”

"Alongside an improvement in manufacturing and a return to growth in the construction sector, the survey data are consistent with quarterly GDP growth of just over 0.2%, up from stagnation in the fourth quarter of last year.”

FX implications

The bearish pressure around the pound remains intact following the downward revision to the UK Services PMI for February, as GBP/USD meanders near daily lows of 1.2780. At the press time, Cable trades at 1.2785, down 0.16% on the day.