The UK’s long Easter weekend ensured a quiet start to the week, with a largely positive day on Tuesday – thanks in part to the better-than-expected Purchasing Managers Index (PMI) for March for the key Service Sector giving sterling a boost against the euro. After disappointing PMI’s for the Manufacturing and Construction Sectors last week, the surprise pick-up in services growth throughout February saw sterling rise sharply across the board. These gains were maintained against the euro throughout the day, but sterling fell in the afternoon against the US dollar thanks to support for the American currency from those investors looking to avoid the uncertainty of both the Greek debt crisis and the UK general election.
We expect today to be relatively quiet across the board, with little major economic news released from the UK. Investors will however look towards UK housing inflation data, as well as the results of the Bank of England’s credit conditions survey as they consider the current economic conditions in the UK.