Pound continues to rise against US dollar following positive economic news
Sterling is continuing to climb against the US dollar on the back of renewed optimism within the UK economy.
News released today sent the pound back above the $1.70 mark - its highest level since October last year.
According to the Office for National Statistics, industrial output rose unexpectedly in June by 0.5% compared with May. While it is still down 11.1% on an annual basis, the rise was at the fastest pace since October 2007, due to a surge in car production.
In the meantime, a survey from the Chartered Institute for Purchasing and Supply (CIPS) showed that activity in the UK’s services sector (the engine room of the country’s economy) also rose unexpectedly in July.
The CIPS purchasing managers’ survey showed a reading of 53.2 for July - up more than two points compared with the previous month. Any figure above 50 indicates growth.
According to figures from CIPS/Markit, nearly a quarter of Britain’s hotels, accountants and other companies that make up the services sector, said business had improved from the previous month.
Yesterday, there were tentative signs that the construction sector is recovering after figures revealed that the slowdown in activity eased in July to the slowest pace for sixteen months.
The CIPS/Markit Construction Purchasing Managers’ Index posted a reading of 47 in July, edging closer to the 50 mark, which shows expansion.
In other news today, the Halifax revealed that the housing slump may be nearing an end after house prices rose 1.1% in July.
This now takes the annual rate of decline to just 12%, down from 15% in June and takes the average cost of a home to £159,623.
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