TM: Pound bounces to 11-week high as UK services sector picks up ahead of Bank's rate decision
The pound rose to an 11-week high against the euro today as new data revealed Britain's services sector picked up faster than expected last month.
The Markit/CIPS services purchasing managers' index increased to 54.9 in October, up from September's 28-month low of 53.3.
Sterling rose to €1.412 after the data was released, its strongest since mid-August, as currency traders saw the evidence of the UK's strengthening economy likely to encourage votes for a rate rise at the Bank of England.
While the bank rate will almost certainly be held at 0.5 per cent by the monetary policy committee tomorrow, analysts reckon said recent improvements in the services, construction and manufacturing sectors could prompt more policymakers to vote for a rise in interest rates by the end of the year.
Against the dollar, the pound increased to $1.5437, compared with $1.5420 before the figures were published.
Economic growth across the UK picked-up by 0.6 per cent by the start of the fourth quarter, the data suggests.
