The Bank of England’s Decision Maker Panel showed 1-year ahead CPI inflation expectations fell to 3.4% (from 3.7%), while 3-year expectations eased to 2.8% (from 2.9%). This suggests businesses expect inflation pressures to continue moderating.
#UK Flash PMIs Beat Expectations:
-Manufacturing PMI: 52.8 vs 52 expected (52.5 previous)
-Services PMI: 51.8 vs 49.4 expected (48.8 previous)
-Composite PMI: 52.1 vs 49.8 expected (49.3 previous)
All three readings came in above forecasts and remained above the 50 threshold, pointing to stronger-than-expected UK economic activity.
Market Takeaway:
The combination of stronger UK PMI data and still-hawkish BoE rhetoric is supportive for GBP, although the decline in inflation expectations could temper expectations for aggressive future rate hikes.
