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