GBPUSD fell during trading today, Friday, in the European market, and this came after some economic data released earlier in the day indicated that the activity of the British services sector had declined more than what was expected during the month of February, reaching its lowest level in 5 years. months, which calmed the optimism about the British economy, of which the services sector constitutes the largest share.
For its part, the market research institution “Markett” stated in its report released earlier today that the Purchasing Managers’ Index for the British services sector witnessed a decrease during the current month, recording an estimated reading of 53.3 points, compared to 54.5 points last month, while analysts’ expectations It was indicating a less severe decline at the level of 54.5 points.
It is worth noting that the services sector constitutes 80 % of the total activity of the British economy, which makes this indicator the most important among all the various Purchasing Managers' Indicators in Britain.
In general, for all PMIs, regardless of the country and sector, any reading that exceeds the level of 50.0 points indicates an expansion in the activity of the sector or sectors during the relevant month, while any reading that does not exceed this level indicates a contraction in the activity of the sector or sectors specified in pointer.
Markit indicated in its report that this is the slowest growth in the sector’s activity since September of last year, and the report also highlighted that there is a slight increase in new business, and despite this, optimism among companies has remained strong. Production inputs to their highest levels in eight and a half years.
Commenting on the results of the report, Chris Williamson, chief economist at Markit said, “There is a slower than expected in the growth of business activity in Britain during the previous February, and this indicates that the royal economy has lost its momentum after the significant expansion it witnessed at the end of the year. “The data explained by this report along with reports issued by other PMIs for the manufacturing and construction sectors indicate a growth of only 0.4 % in the first three months of the new year,” adding, “The weakness in consumer spending was one of the The main reasons for the slowdown in the growth of the service sector, which indicates that the purchasing power of British families has begun to decline under the pressure of high prices and weak growth in wages.
Williamson has indicated that the continuous rise in production costs indicates that it is likely that the indicators of consumer price inflation will rise to exceed the level of 3 % during the next year. The Bank of England, “the British Central”, justified by saying that there was a need for more economic stimulus measures, noting that “it is likely that policy makers with regard to monetary policy will continue to emphasize the need not to ignore any further improvement in inflation measures and focus instead on the need to maintain More accommodative monetary policies to counter the slowdown in economic growth over the next year.
After the release of this report, GBPUSD recorded the level of 1.2227, its lowest price since the seventeenth of last January, before it consolidated at 1.2235, declining by 0.26 %.