A poor start to the week for sterling has seen it fall across the board as the latest Purchasing Managers’ Index (PMI) from the construction industry showed the lowest rate of growth in over a year. Following a similarly disappointing reading from the manufacturing industry last week, this saw sterling fall to a 17-month low against the US dollar, and away from recent nine year highs versus the euro. Predictions of another hung parliament at the upcoming elections in May only served to make investors more wary of sterling, and points to further uncertainty ahead for sterling.
Today we see release of growth data from the services industry, the key UK industry sector and a major contributor to UK economic growth. A positive figure could see sterling recover much of its losses from earlier in the week but a worse than expected will see further sterling weakness. Results of the Bank of England (BoE)’s latest credit condition survey should also provide interest, detailing how both bank and non-bank lenders view the current credit conditions in the UK.