020 7898 0500The pound weakened against the euro and dollar yesterday following the release of the UK services PMI data, although it ended up recovering against the greenback. Services PMI rose to 52.8 in April from 51.7 in March, it was still below expectations and is one of the weakest readings in the last two years. There is now genuine concern that the UK economy is losing momentum quickly. Poor GDP data, coupled with disappointing services and manufacturing PMI data means it is extremely difficult to justify an interest rate rise in May.
Indeed, if HSBC is to be believed, not only will there not be a rate hike in May, but there won’t be one for the rest of 2018 or 2019. These are worrying times and the continuing uncertainty surrounding the Brexit negotiations is certainly not helping matters. As it stands, the government is trying to come up with two different proposals for a customs arrangement with the EU. However, both options have already been rejected by the EU so you do have to wonder how much progress is likely to be made in the near future.
Today we’ll see new car sales for April. The figures were extremely poor last week so it will be interesting to see whether there is significant improvement.
