The pound strengthened against the euro and the dollar on Friday after PMI data showed that the UK economy is still expanding despite rising living costs, albeit at the slowest rate since early 2021. This morning, sterling has weakened against the dollar on growing recession fears.
Both the manufacturing sector and the services sector expanded in July, but at a slower rate than in June.
Chris Williamson, the chief business economist at S&P Global Market Intelligence, said: “Although not yet in decline, with pent-up demand for vehicles and consumer-oriented services such as travel and tourism helping to sustain growth in July, the PMI is now at a level consistent with just 0.2% GDP growth. Forward-looking indicators suggest worse is to come.”
It’s a quiet week for UK data. Today, CBI industrial trends orders and business optimism index will be released.
