Latest data released by Markit/CIPS - 5 August 2020

  • Composite PMI 57.0 vs 57.1 prelim

The preliminary release can be found here. Much like the euro area, the UK economy showed modest signs of a rebound as activity picks up after the easing of virus restrictions.

However, the government's furlough program is still masking some underlying weakness in the labour market and that will be a key spot to watch moving forward in gauging the sustainability and pace of the recovery over the next few months.

Cable erased earlier gains in a fall from 1.3120 to 1.3060 in the past half-hour but is now trading closer to unchanged levels at 1.3075 - little changed from the report here.

Markit notes that:

"UK service providers are starting to see light at the end of the tunnel after a record slump in business activity during the second quarter of 2020. July data revealed the fastest increase in business activity for five years, which adds to signs of recovery across the manufacturing sector this summer.

"Higher levels of service sector output were almost exclusively linked to the reopening of the UK economy after lockdown measures and the subsequent return to work of employees and clients. However, these are still the very early stages of recovery and survey respondents often commented on achieving growth from an exceptionally low base.

"While the latest survey data provide a number of positive signs that the UK economy is back in expansion mode, the weakness of the employment figures reported in July is clearly a cause for concern and likely to hold back the longer-term recovery in business and consumer spending."