May 3, 2018 / 9:01 AM / 7 months ago

Sterling trims gains after weak services sector numbers

Pound coins are seen in the photo illustration taken in Manchester, Britain September 6, 2017. REUTERS/Phil Noble/Illustration

LONDON (Reuters) - Sterling trimmed gains and stocks hit the session highs on Thursday after a major survey showed Britain’s services sector struggled to recover in April from a sharp slowdown in March, further squeezing expectations of an interest rate hike next week.

Sterling trimmed gains to stand 0.2 percent up on day at $1.3598 compared to $1.3630 earlier. It later recovers most of those losses.

Britain’s FTSE 100 rose to a session high, up 0.04 percent as a weaker sterling is expected to boost overseas earnings.

UK gilt futures rose 10 ticks after the weaker-than-expected survey and turned positive for the day.

The IHS Markit/CIPS services purchasing managers’ index (PMI) rose to 52.8 in April from March’s 20-month low of 51.7, a smaller increase than economists had forecast in a Reuters poll and its second-lowest level since September 2016.

Reporting by Saikat Chatterjee, William Schomberg and Helen Reid; Editing by Tommy Wilkes

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