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The pound reacts to strong service sector data

5 Feb 2020 03:57 PM

PMI services data in UK pushed the pound to rise significantly, but it is still near its lowest level in 6 weeks, after Britain took the difficult line in trade negotiations with the European Union.

According to analysts, the concern that fiscal expansion in Britain may not be as generous as previously expected, also weighed on the British pound.

The services PMI, which is the largest contributor in Britain's GDP, revised to 53.9 in January from 52.9, and this reading is the strongest reading since September 2018.

The pound sterling rose by 0.3% at 1.3069, but it is not very far away from the low at 1.2940, which arrived on Tuesday, after the statements of the British Prime Minister, Boris Johnson that Britain will not adhere the rules and laws of the European Union.

It is expected that the minister of Finance, Sajid Javid will present the new budget of the recently formed government on 11 March, but tensions between the allies of Javid and Johnson, are increasing, as Javid threatened to impose serious constraints on spending for the government.