The Preliminary UK manufacturing PMI index rose six tenths in October to 57.7 from 57.1 in September, improving the 55.8 points expected by the market consensus.
The Preliminary PMI for services improved to 58 from 55.4 the previous month, reaching three-month highs. The result exceeded the 54.5 points expected by the market.
According to IHS Markit, the UK recovery regains momentum in October, but supply shortages affect manufacturing growth as cost inflation hits a new record.
Chris Williamson, Chief Economist at IHS Markit, notes: “The UK economy accelerated again in October, but expansion seems increasingly dependent on the service sector, which in turn appears prone to a slowdown amid the recent surge in COVID-19 cases. The growth is also accompanied by an unprecedented rise in inflationary pressures, which will inevitably translate into higher consumer prices in the coming months. “
GBP / USD reaction
GBP / USD is up close to 30 pips on the good data from the UK. The pair has jumped to 1.3806, approaching the day’s highs of 1.3809. At time of writing, the pair is trading above 1.3798, gaining 0.04% on the day.