UK: Preliminary services PMI returns to expansion territory in November

• The UK Manufacturing PMI rose to 46.7 in November, above expectations of 45.0.
• The UK services PMI jumped to 50.5 in November, much higher than expected.
• GBP/USD rallied strongly on strong UK business PMIs, but quickly pared gains.

The Purchasing Managers Index Seasonally Adjusted Manufacturing PMI published by S&P Global/CIPS for the United Kingdom rose to 46.7 in November, compared to the expected 45.0, improving on October’s 44.8. This is his best result in six months.

The services PMI has also surpassed expectations, jumping to 50.5 from 49.5, its highest level in four months. The indicator has returned to expansion territory and has improved the outlook for the market, which was expected to remain unchanged from 49.5.

Data for November indicated a stabilization of UK private sector output, following marginal reductions in each of the previous three months. This was supported by a return to the expansion of business activity in the service sector economyalong with a milder slowdown in manufacturing production.

However, total new order intake declined for the fifth consecutive month, suggesting that weak underlying demand conditions persist. There were new signs of persistent inflation in November, as both input costs and average prices charged rose at faster rates than in October. Service providers reported the largest increase in their average rates since July, which was overwhelmingly related to higher staff costs.

GBP/USD reaction

He GBP/USD has shot up 65 pips after good UK PMI data. The pair has risen to 1.2575, its highest level in eleven weeks. At the time of writing, the Pound is trading against the Dollar above 1.2548, gaining 0.42% on the day.