The latest survey on the UK service sector has shown an increase in the pace of growth, providing a boost to the pound which was languishing near its lowest level against the US dollar in almost 3 weeks prior to the release. The FTSE 100 is little changed on the day after posting consecutive impressive daily gains in the past couple of days.
Services data alleviates some pessimism
A reading of 53.6 for the September UK services PMI is slightly above the consensus forecast of 53.2 - which was forecast inline with the prior reading - and the positive data will go some way to allaying recent economic fears. Following on from below expected PMI readings for manufacturing and construction today’s print is a welcome boost and will provide a nice tonic to those who were growing concerned as to to the health of the economy. Having said that the data itself isn’t unequivocally positive, with rising costs and falling confidence evident amongst the respondents in what is the UK’s largest sector and comprises around 80% of the wider economy. The reaction in the pound has been an immediate move to the upside, with the GBPUSD popping higher and moving away from Tuesday’s low which wasn’t far from the levels seen before the hawkish BoE meeting last month which itself had sparked the sharp move higher in this pair.
Tesco (LON:TSCO) turnaround “very firmly on track”
After posting a rise in sales for the 7th quarter in a row Dave Lewis, the CEO of Tesco, has stated that the supermarket’s turnaround is “very firmly on track”. Whilst the 2.1% rise in like-for-like sales during the second quarter and a jump in pre-tax profit to £562m for the first half were clear positives from the latest trading update, the share price has experienced some volatile trade with the figures coming in just short of analysts forecasts. Shares popped to their highest level since April shortly after the open but they have since pulled back a little and are currently trading lower by around 1% on the day.
Centrica (LON:CNA) and SSE (LON:SSE) sink ahead of PM speech
Energy providers have seen some strong selling this morning with Centrica and SSE both firmly lower due to concerns ahead of Prime Minister Theresa May’s speech. Reports are circulating that the PM will use her speech at the Conservative party conference to announce some new details on government energy policy with the changes expected to be negative for two of the largest current providers.