EUR, GBP flows: GBP gaining from better PMI, but...

Better than expected UK PMI have pushed GBP higher on the day, with EUR/GBP dipping on the favourable comparison with the Eurozone. However, we would note that the UK PMIs have very limited correlation with official data, and would take the UK numbers with a large pinch of salt. The Eurozone numbers do tend to better resemble official data, so there is some case for a softer EUR. The weak UK HMRC earnings and employment data earlier also don’t argue for GBP strength, even though the official  ONS data were a little less weak than expected, with the HMRC data being more up to date.