UK Services Sector Boosts PMI Data Just as PM Plans to Remove Covid Restrictions

IHS Markit Composite (FLASH) PMI Accelerates in February

• 60.2 (Actual) vs 55 (Expected)

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Private sector output expanded the most over the last eight months, led by a strong recovery in consumer spending on leisure, travel and entertainment. Early Omicron disruptions have subsided significantly and news that UK Prime Minister Johnson plans to scrap Covid restrictions as part of a “living with Covid” strategy, allowing the UK to achieve a swifter exit from the pandemic than other developed nations, could further support Sterling.

European PMI Mostly Positive

Earlier this morning, PMI data out of Germany showed a miss in manufacturing PMI with a beat in services PMI, resulting in a positive composite (weighted average of the two figures) PMI print. France witnessed better than expected prints in both departments with particularly strong services data at 57.9 vs the expected figure of 54.

Market Reaction:

The Pound hardly reacted to the positive news, perhaps symptomatic of the indecision in financial markets as a result of the unresolved geopolitics surrounding Ukraine. GBP/USD largely flat after the release but somewhat higher in the lead up to the data.

GBP/USD 5 Min Chart

Source: IG, prepared by Richard Snow

--- Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX