It’s been a while since the UK economy delivered this many positive surprises in a single week. The purchasing managers’ index (PMI) composite reading of 53.9 points to solid expansion, retail spending is up sharply, and the fiscal picture looks healthier than expected. That’s given the pound a decent platform. The rate outlook is the next thing to watch. Markets price roughly a 90% chance of a cut to 3.5% on 19 March, but Bailey’s caution over services prices suggests it’s far from a foregone conclusion. Next week’s Spring Statement on 3 March will also matter – updated growth forecasts from the Office for Budget Responsibility could shift the mood quickly.
GBP/USD: the past year
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