United Kingdom flash Services PMI expands faster to 52.8 in August, beats 51.8 estimates

Sagar Dua FXStreet

The United Kingdom (UK) S&P Global Composite Purchasing Managers' Index (PMI) expanded surprisingly at a faster pace to 52.5 in August due to robust service sector activity. The Composite PMI was expected to arrive lower at 51.6 from 52.2 in July.

The Service PMI also expanded unexpectedly at a faster pace to 52.8 from the previous reading of 52.1. The data was expected to come in lower at 51.8. Meanwhile, the Manufacturing PMI dropped to 51.5, as expected, from 51.9 in July.

Market reaction

A slight upside move is seen in the British Pound (GBP) against the US Dollar (USD) after the data release. However, this appears to be the outcome of a downside move in the US Dollar. As of writing, GBP/USD trades 0.15% higher to near 1.3650.

Economic Indicator

S&P Global Services PMI

The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for GBP.

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