S&P Global’s August Purchasing Managers’ Index (PMI) reports reflected strong expansions in UK private sector activity, with manufacturing jumping to a 26-month high and services rising to a four-month high.
The composite index measuring the manufacturing and services sectors was also in the spotlight as it reached its highest levels since April:
- Manufacturing PMI rose from 52.1 to 52.5
- PMI Services Improved from 52.5 to 53.3
- Composite Purchasing Managers’ Index Jumped from 52.8 to 53.4
According to the report,Increased business activity and flexible demand conditions contributed to an increase in employee employment, with the rate Employment growth Fastest since June 2023.“Companies also continued to pass on higher input costs through higher prices charged, although the latest Price increase He was “Among the slowest since the beginning of 2021.“
Link to S&P Global PMI UK August reports
The report detailed,
“August sees a welcome combination of stronger economic growth, improved job creation and lower inflation…
…so the latest survey data helps to lower the bar for further rate cuts, although the high nature of service sector inflation suggests policymakers will move cautiously.
Market reaction
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The broad strength in private sector activity in August has reduced the likelihood of the Bank of England pursuing an aggressive easing path of monetary policy.
It is no surprise that the pound is rising against its major counterparts. The pound even hit new intraday highs at the opening of the US session and held on to gains except against the US dollar and the Swiss franc.