• UK Manufacturing PMI improves to 46.7 in January, a positive surprise.
• Services PMI in the UK comes in at 48.0 in January, a big miss.
• GBP/USD drops toward 1.2300 on mixed UK PMIs.

The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) unexpectedly improved to 46.7 in January versus 45.0 expected and 45.3, December’s final reading.

Meanwhile, the Preliminary UK Services Business Activity Index for January arrived at 48.0 when compared to December’s final print of 49.9 and 49.9 expected.

Chris Williamson, Chief Business Economist at S&P Global, commented on the survey

“Weaker than expected PMI numbers in January underscore the risk of the UK slipping into recession. Industrial disputes, staff shortages, export losses, the rising cost of living and higher interest rates all meant the rate of economic decline gathered pace again at the start of the year. Jobs also continued to be lost as firms tightened their belts in the face of these headwinds, though many other firms reported being.”

FX implications

Downbeat UK Services PMI served has a negative impact on the GBP/USD pair. The spot is losing 0.21% on the day to trade at daily lows near 1.2345.