Sterling briefly fell against the dollar and euro after soft UK economic data showed the UK service sector, the largest sector in the country, grew less than expected in April. The Markit/CIPS Purchasing Managers’ Index for the service sector posted weaker than expected results at 53.3 versus analyst forecasts for 54.2. This was down from the March figure of 55.3.
That was the lowest reading since November, although the index still remained above the 50-mark that separates the contraction and expansion phase.
PMI surveys earlier this week showed that manufacturing and construction expanded, though less than in March.
Markit Chief economist, Chris Williamson is fairly optimistic about the UK economy and does not think the numbers were bad.
“From what we are hearing from panelists, this certainly does not sound like an economy in recession,” said Chris Williamson.
Markit’s composite index, which brings together all three business sectors, pointed to economic growth last month. Better market conditions and a solid rise in new business boosted activity in the service sector in April.
GBPUSD dipped briefly to 1.6162 from 1.6173 after the data but recovered. EURGBP jumped to 0.8133 from 0.8130 before falling back.