EUR/GBP RISES AFTER BOE MEETING SHOWS ZERO OFFICIALS VOTING FOR HIGHER INTEREST RATES

• EUR/GBP rebounds after the BoE meeting shows no board members voting for a rate hike. 
• Previously one member had held out for an interest rate hike. 
• UK PMI data also shows overall fall in Composite and Services, although Manufacturing recovers. 

EUR/GBP is trading up by almost three tenths of a percent on Thursday in the 0.8560s after the outcome of the Bank of England (BoE) meeting and overall weaker-than-expected British PMI data, weighed on the Pound Sterling (GBP) side of the pair. 

The Bank of England left interest rates unchanged at 5.25% at its meeting on Thursday but the distribution of votes changed to show none of the officials voting for an interest rate hike. This was a change from the one who voted for a hike at the last meeting. Instead the majority of eight board members voted for no-change – one more than the previous meeting – and only one voted for a cut in interest rates, as before. 

The Pound Sterling was hit by the lack of any BoE officials voting to raise interest rates, since higher interest rates are a positive factor for currencies because they attract greater inflows of foreign capital. 

Both Eurozone and UK PMI data for March showed overall cracks in the outlook. In the case of the UK, the S&P Global/CIPS Composite PMI came out lower-than-expected at 52.9 when 53.1 had been forecast from 53.0 previously. 

UK Services PMI undershot expectations of remaining at 53.8, dropping to 53.4. Manufacturing actually beat expectations at 49.9 when 47.8 had been forecast from 47.5 previous. 

In the Eurozone, the HCOB Composite PMI rose to 49.9 thereby beating estimates of 49.7 and the previous February reading of 49.2. 

Eurozone HCOB Manufacturing PMI in March fell to 45.7, declining deeper into contractionary territory (below 50) than had been predicted. Economists had estimated a more buoyant rise to 47.0  from 46.5 previously.

Euro area HCOB Services PMI rose to 51.1 in March, beating estimates of 50.5 from 50.2 previous, according to data from S&P Global. 

Europe's economic powerhouse Germany, meanwhile, revealed a similar trend, with German HCOB Manufacturing PMI declining to 41.6 which was below estimates of 43.1 and February's 42.5. It too showed unexpected gains, however, in both Services component and the Composite number.