Business activity showed unexpectedly growth in October according to the UK services survey. The survey revealed was better than expected at 53.2, which was up from 52.8 in September and the forecasted 52.5.
However, austerity measures by government weighed on expectations and employment levels of companies. After the survey results were disclosed, the pound rose to its highest level against the dollar for nine months to $1.6136.
From Guardian.co.uk:
Indeed, the UK services survey is already out and it showed business activity unexpectedly growing in October. The index figure of 53.2 was up from 52.8 in September and better than the forecast 52.5. But worries about the government’s austerity measures weighed on companies’ expectations and employment levels. After yesterday’s disappointing construction figures raised the prospect of further quantitative easing from the Bank of England, the services survey points in the opposite direction. But Howard Archer of IHS Global Insight said there was no clear picture either way:
The October services sector survey fails to provide major ammunition to either the more hawkish or more dovish members of the Bank of England’s Monetary Policy Committee. Consequently, we believe that the odds heavily favour the MPC keeping interest rates down at 0.50% at the end of their November meeting on Thursday and holding fire for now at least on further Quantitative Easing. However, a three-way split vote looks very much on the cards.
In the wake of the survey the pound rose to its highest level against the dollar for nine months to $1.6136 while the euro slipped from 87.33p to 87.08p. The FTSE 100 has continued to rise and is now up 15.61 points at 5773.04.
The euro slipped from 87.33p to 87.08p after the survey results.
