GBP flows: GBP up on stronger composite PMI

UK PMIs show a similar story to the Eurozone PMIs, with services significantly stronger but manufacturing weaker. GBP has risen on the data, with EUR/GBP dropping back a little below opening levels having gained ground after the Eurozone PMIs. The prospects from here will depend on whether the BoE see the PMIs as a genuine indication of recovery, and if they do, whether they believe this will hamper the required decline in services inflation. We may learn more on this front from BoE chief economist Huw Pill who speaks early this afternoon. For now, the stronger PMI should keep GBP on the front foot, with scope for EUR/GBP to test down towards 0.86, but a break lower looks unlikely before Pill speaks.