UK Preliminary Services PMI inches lower to 49.2 in October vs. 49.5 expected

• UK Manufacturing PMI rose to 45.2 in October, above expectations of 45.0.
• Services PMI in the UK fell to 49.2 in October, a downside surprise.
• GBP/USD is recapturing bids above 1.2250 on mixed UK business PMIs.

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose to 45.2  in October versus the 45.0 expected and, 44.3 - September’s final readout.

Meanwhile, the Preliminary UK Services Business Activity Index reached a nine-month low of 49.2 in October, compared with a 49.3 final print for September and the 49.5 expected figure.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said: “The UK economy continued to skirt with recession in October, as the increased cost of living, higher interest rates and falling exports were widely blamed on a third month of falling output.”

“The overall pace of decline remains only modest, signalling a mere 0.1% quarterly rate of GDP decline, but gloom about the outlook has intensified in the uncertain economic climate, boding ill for output in the coming months. A recession, albeit only mild at present, cannot be ruled out,” Williamson added.

FX implications

At the press time, GBP/USD is back on the bids near 1.2260 despite the mixed UK data, adding 0.09% so far.