HomeFinancial MarketsSterling Rises Amid Increasing British Business Activity

Sterling Rises Amid Increasing British Business Activity

The sterling strengthened on Tuesday following the release of Britain’s preliminary “flash” Purchasing Managers’ Index. This data indicated a rise in British business activity, thereby indicating that the United Kingdom may be avoiding the effects of an impending deep recession.

Jumping from a score of 48.5 in January to 53.0 in February, the Purchasing Managers’ Index has surpassed the 50 threshold for the first time since July last year. In addition, the Index outperformed the 49.0 score that was predicted in a Reuters poll of more than 20 economists.

MUFG senior currency analyst Lee Hardman believes that the UK’s rising business activity has a direct correlation with the strength of the pound, explaining, “It’s another indicator that the UK economy is proving more resilient than people had feared at the end of last year, which is helping to support the pound in the short term.”

The pound advanced by 0.4% against the dollar, now standing at $1.2088. It also strengthened against the euro, with the euro falling 0.72% to 88.17 pence—the largest daily percentage fall in a month.

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