020 7898 0500The headlines were understandably dominated by the Bank of England’s interest rate decision yesterday and, as expected, rates were increased by 25 basis points to 0.75%. It is the highest level for almost a decade but the news wasn’t welcomed by everyone. Indeed, several business groups said that it was a mistake to hike rates and they hoped that borrowing costs won’t be increasing again anytime soon.
There was some positive news in the form of construction PMI for July, which came in much better than expected. Any figure over 50.0 shows growth, but the reading of 55.8 was particularly impressive. It is the strongest pace of expansion since May 2017, although optimism over future performance remained unchanged because of Brexit-related uncertainty.
Today we have the services PMI for July which is expected to dip to 54.7 from 55.1 the month before. The services sector has been supporting the UK economy to some extent, so it will be interesting to see what the reading shows. If it comes in well below expectations we might see some further sterling weakness.
