British Pound: Unfazed By Weaker Economic Data

Activity in the UK service sector slowed to the weakest level in 4 months, which led to some temporary weakness in the British pound.

The currency quickly recovered however on the heels of a disappointing US Jobless claims report. The Bank of England faces a tough decision next week when they meet to decide on interest rates. With activity slowing in both the manufacturing and service sector, the economy could use a rate cut. However like the Eurozone, the UK faces inflationary pressures. The input price component of the service sector PMI hit a record high. Output prices on the other hand, have moderated slightly but are also very close to its record.