UK Final Services PMI revised higher to 53.6 in December

• UK Final Services PMI upwardly revised to 53.6 in December.
• GBP/USD holds a rebound above 1.3500 on the upbeat UK data.
• Eyes on US Jobless Claims, ISM Services PMI ahead of Friday’s NFP.

The UK services sector activity expanded more than expected in December, the final report from IHS Markit confirmed this Thursday. 

The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised higher to 53.6 in December versus 53.2 expected and a 53.2 – last month’s flash reading.

Key points

Worst month for service economy since February 2021.

Export sales hard-hit by renewed pandemic restrictions.

Service providers remain upbeat about year ahead prospects.

Tim Moore, Economics Director at IHS Markit, which compiles the survey

“December data revealed a severe loss of momentum for the UK economy as many customer-facing businesses experienced a drop in demand due to escalating COVID-19 cases.”

“Total new orders in the service sector increased at the weakest pace for 10 months. Mass cancellations of bookings in response to the Omicron variant led to a slump in consumer spending on travel, leisure and entertainment. Survey respondents also noted that renewed pandemic restrictions had slowed the recovery in business services.”

FX implications

GBP/USD is holding onto its rebound above 1.3500 on the above-forecast UK data. The spot is trading at 1.3512, down 0.30% on the day.