The pound drifted higher yesterday but stayed within recent ranges. Services PMI showed that the sector stagnated last month due to Brexit uncertainty. The figure came in above expectations and rose to 50 but signalled no change in service sector output and was among the lowest registered in the past 10 and a half years.
This comes ahead of the Bank of England’s policy meeting on Thursday. The bank is expected to keep interest rates unchanged at 0.75%, however, if we continue to see weak data, a future rate cut could be more likely. The Bank of England may also consider the implications of a hung Parliament as a result of the upcoming general election, which could mean that the Brexit debate continues past the 31st of January.
