The Great Britain pound was soft today after Britain’s services sector demonstrated surprisingly poor performance, expanding at the slowest rate in two-and-a-half years. Positive retail sales data was not able to offset the impact of the negative report.
The seasonally adjusted IHS Markit/CIPS UK Services PMI dropped to 50.1 in January, down from 51.2 in December, while experts had predicted it to stay about unchanged. It was the lowest reading since July 2016 and dangerously close to the neutral 50.0 level of no growth. Furthermore, the report said that firms reduced the number of jobs for the first time in six years.
Released earlier, a report from British Retail Consortium showed that like-for-like retail sales rose 1.8% in January from a year ago. That is compared to the median forecast of a 0.2% drop and the decline by 0.7% registered in December. Yet the report was not particularly optimistic, saying:
But while retail discounts helped tempt cautious consumers, there is no guarantee this momentum will continue after the sales have finished.
GBP/USD dropped from 1.3034 to 1.3006 as of 13:39 GMT today. EUR/GBP climbed from 0.8770 to 0.8788 after touching the session low of 0.8747 earlier today. GBP/JPY declined from 143.20 to 142.84.
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