Commenting on the UK PMI data, Andy Scott, associate director at JCRA, said: “UK economic data last week showed a better than expected recovery following the outcome of last month’s election, making a rate cut this week less likely. Sterling rallied to a five-week high above 1.19 versus the Euro in the lead up to the PMI data release, as a combination of weaker Eurozone PMI data and market expectations of stronger UK surveys drove demand for the UK currency. Sterling did however drop around half a percent after the data, reflecting the fact that the chance of a rate cut is still 50/50.

“So far the evidence points to a significant pick up in UK business optimism and consumer confidence, following the Conservative’s convincing election victory. We expect this is likely to mean that the Bank of England keeps rates on hold this week, preferring to wait and see whether the economy is starting to reverse the weakening growth trend.

“Having been faced with several Brexit paths that left UK politics completely dysfunctional and businesses unable to plan much beyond a few months ahead, there is now just one path.”