UK Preliminary Manufacturing PMI beats estimates with 53.3 in Oct, GBP/USD slips below 1.31

The UK manufacturing and services sector activities showed mixed performance in October, the preliminary report from IHS Markit showed this Friday. 

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) dropped to a three-month low of 53.3 in October versus 53.1 expected and 54.1 – September’s final reading.

Meanwhile, the Flash UK Services Business Activity Index for October hit a four-month low of 52.3 versus September’s final readout of 56.1 and 54.0 expected.

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

"The pace of UK economic growth slowed in October to the weakest since the recovery from the national COVID-19 lockdown began. Not surprisingly the weakening is most pronounced in the hospitality and transport sectors, as firms reported falling demand due to renewed lockdown measures and customers being deterred by worries over rising case numbers.”

"The slowdown would have been even more pronounced had it not been for exports rising as overseas customers sought to secure orders before potential supply disruptions as Brexit draws closer.”

FX implications

The mixed UK Preliminary Manufacturing and Services PMIs checked the rally in GBP/USD, as the major fell back below 1.3100.

At the time of writing, the cable trades at 13097, adding 0.15% on the day.