GBP Inches Higher as UK PMI Surprises to the Upside, BoE Stays Neutral

GBP Inches Higher as UK PMI Surprises to the Upside, BoE Stays Neutral

British Pound Sees Modest Lift on Final PMI Data

The British Pound (GBP) is creeping higher in Wednesday’s North American session, remaining within a narrow range against the US Dollar (USD). The movement follows the release of better-than-expected UK PMI data, offering modest support to Sterling.

Final PMI Readings Push Into Expansion

Final figures from S&P Global/CIPS show the UK Services PMI climbing from a preliminary 50.2 to 50.9, while the Composite PMI improved to 50.3 from 49.4, signaling slight expansion in business activity.

Despite this improvement, gains remain subdued.

"GBP has been muted since last Monday's multi-year high, holding its ground in the absence of major domestic data," noted analysts at Scotiabank.

Bank of England Commentary Remains Balanced

The Bank of England (BoE) has offered little to excite markets, maintaining a neutral stance on short-term interest rate policy, while sounding conservative for the medium term.

Markets are currently pricing in a hold at the June 19 meeting, but also anticipating nearly 40 basis points of easing before the end of 2025. This cautious outlook may cap further Sterling appreciation in the near term.

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