The British currency jumped Monday after official report said manufacturing activity in the U.K. rose at the fastest rate since June 2014 in October, supporting optimism over the country’s economic outlook and thus the case for higher interest rates.
GBP/USD was trading at 1.5471 from around 1.5454 ahead of the release of the data, while EUR/GBP was last at 0.7117 from 0.7137 earlier.
Market research group Markit said in a report that its U.K. manufacturing PMI climbed to a seasonally adjusted 55.5 in October from a reading of 51.8 in September. Analysts had expected the gauge to dip to 51.3 in October. A reading above 50.0 signals industry expansion, and below 50 indicates contraction.
The 3.7 point gain in the PMI level was one of the sharpest registered during the near 24-year survey history.
October saw solid improvements in the rates of growth in output and new orders, in both cases the steepest since the middle of 2014.
The new contract wins were mostly noticed in the domestic market, whilst back-to-back increases in new export business were signalled for the first time since the third quarter of 2014.
Rob Dobson, senior economist at survey compiler Markit, commented: “Based on historical comparisons, the survey is consistent with a quarterly rate of growth of around 1%, a vast improvement on what we have seen in recent months."
Meanwhile, London's equity market gauge FTSE 100 was still in the red trading down 0.12%.
