UK pound is struggling today, barely etching out gains against major currencies. The latest services output data disappointed analysts today, showing a drop instead of an increase. Concerns about the UK economy are on the rise now, thanks to this latest data.
Markit Economics reports that the services output gauge fell to 58.8 in December, down from 60 in November, This comes as a surprise, since many had expected it to rise to 60.3. The latest news stokes fears about the UK economy, and what might be next for the pound as a result.
With economic data lackluster, the Bank of England might change its approach. BOE Governor Mark Carney is now considering making a 6.5 per cent unemployment rate the new target to hit before interest rates are increased. Right now, the target is 7 per cent, but there are concerns that unemployment isn’t dropping as much as many would like with the economic improvements.
For now, though, the unexpectedly poor reading is weighing on the pound, and the sterling is doing its best against other majors. This is a bit of a turnaround for a currency that has seen a 7.1 per cent increase in the last six months.
At 15:15 GMT GBP/USD is up to 1.3411 from the open at 1.6395. EUR/GBP is up to 0.8294 from the open at 0.8292. GBP/JPY is up to 171.9725 from the open at 171.8750.
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