The UK service sector returned to growth in August, according to IHS Markit’s Purchasing Managers Index. This adds to growing evidence of a rebound in the UK economy, following the vote to leave the European Union. The Business Activity Index surged to 52.9 in August, from a seven-year low of 47.4 in July, in the biggest monthly gain in the survey’s 20 year history.
This return to growth in the largest part of the economy is likely to increase speculation the Bank of England will not announce further stimulus this year. On Wednesday, BOE Governor Mark Carney will give his first public appearance since the central bank announced stimulus last month. He will answer questions from a panel of lawmakers, including those who campaigned for Britain to leave the EU. With recent data showing a resilient economy, he may be asked whether he acted too quickly in response to the referendum result.
Prime Minister Theresa May spoke at a news conference after a two-day summit of leaders from G20 nations in China yesterday. She said she wanted Britain to become a global leader in free trade, as it exits the European Union. May also said that so far, there had been positive reactions from partners about securing new trade deals.
The Dollar weakened and emerging markets gained, while the nation celebrated Labour Day. This came after Friday’s U.S. jobs figures curbed speculation that the Federal Reserve will raise interest rates this month. The likelihood of the Fed hiking this month ended last week at 32 percent, having been 34 percent on Thursday. The probability fell to 20 percent briefly, following on from the jobs report.
15:00 – US : ISM Non-Manufacturing PMI , expected to be 55.4