fundamental alert

U.K. Services Slips to Record Lows, Weighing on the Growth Outlook

Wednesday, 03 December 2008 08:46:24 GMT  |  DailyFX Research

U.K. November services PMI fell more sharply than expected, hitting a new series low of 40.1 compared to a market median estimate for 41.3 and compared to 42.4 in October. A breakdown of the headline reading shows that the sub-indicies for employment, incoming new business, outstanding business and business expectation all hit new series lows, while prices charged was the lowest in 7 years. Data hence highlight the very depressed state of Britain's important services sector and with the outlook for the situation to deteriorate next year, today's data further underpin the likelihood of aggressive BoE rate cuts.
Meanwhile, Pound-Dollor (GBP/USD) losses accelerated after the U.K. PMI, which came in at series lows of 40.1, which was below the market median of 41.3. Cable experienced some profit taking between 1.4700-10, but selling was heavy from 1.4730, which saw prices gap down to 1.4664 lows. The EUR/GBP gains extended to 0.8596, where good offers have slowed further gains. Risk for sterling remains on the downside, with a temptation for speculative accounts to force fresh trend lows ahead of tomorrow's BoE rate decision. Cable will target 1.4555 recorded on November 13th and the EUR/GBP eyes its all time high of 0.8662.

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