The current situation in the UK is in stark contrast compared to the EU. Business optimism in the private sector soars as Brexit uncertainty falls ahead of the 31st of January deadline.
“January data from the IHS Markit / CIPS Flash UK Composite PMI® highlighted a decisive change of direction for the private sector economy at the start of 2020. Business activity expanded for the first time in five months, driven by the sharpest increase in new work since September 2018.”
In the market report, it is revealed that the British economy has improved in all three major aspects. The composite output index is at a 16-month high. The Services Business Activity Index is at an 8-month high and Manufacturing PMI is at a 9-month high.
The sharp uplift in the business sentiment is owing to the diminished Brexit uncertainty that is the consequence of the last General Election in Britain.
UK Business Confidence. Image source: TradingEconomics.com
If the optimism is allowed to persist, the British pound is likely to continue to be bolstered and register its gains, as it has been the case since the beginning of the month.
In the short-term, however, the pair is currently testing the strength of the major support level at 1.30900.
GBPUSD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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