UK Equities Close Week Higher as Services PMI Hits Four-Month Peak and Gold Lifts Miners
Traveloasisspot.com – London’s benchmark share index finished Friday’s session in positive territory, extending a week of modest gains after new economic data revealed that Britain’s private-sector economy accelerated in August. A sharp rally in the gold price also provided a tailwind for precious-metal miners, adding further momentum to the close.
The FTSE 100 added 68.40 points, or 0.6 per cent, to settle at 10,816.56. The mid-cap FTSE 250 gained 210.16 points, equivalent to 0.9 per cent, finishing at 24,718.82. Smaller-listed names tracked by the AIM All-Share index rose 7.87 points, a 1.0 per cent increase, to close at 811.96. Over the full trading week, the FTSE 100 posted a 0.6 per cent gain, the FTSE 250 slipped 0.6 per cent, and the AIM All-Share climbed 1.1 per cent.
Services Sector Drives PMI to Six-Month High
The S&P Global flash composite purchasing managers’ index for the UK climbed to 52.5 points in August, marking a four-month peak and comfortably exceeding the consensus estimate of 51.6 points that had been widely cited. The July final reading stood at 52.2. Because the composite blends both services and manufacturing activity, the August print reflected a clear divergence between the two components.
The services PMI surged to 52.8, a six-month high, up from 52.1 in July. Manufacturing, by contrast, softened to 51.5, a five-month low, down from 51.9. The services-led composition of the print underscored the continued rotation of UK economic momentum away from factory floors and toward consumer-facing and business-services industries.
“Sends another positive message on growth” and “points to modest upside risks to our (third quarter) growth forecast,” said JPMorgan analyst Allan Monks on the implications of the August data.
Retail Sales and Public-Sector Borrowing Cloud the Picture
Not every datapoint released that week pointed in the same direction. Retail sales volumes, as compiled by the Office for National Statistics, grew 1.6 per cent year-on-year in July, a marked deceleration from the 3.8 per cent jump recorded in June. The figure fell short of the consensus forecast of a 2.2 per cent increase. Month-on-month, retail sales contracted 0.5 per cent in July, matching expectations after a 0.7 per cent rise in June. June’s own reading had been revised downward from an initially reported 1.0 per cent gain.
On the fiscal front, ONS data showed public sector net borrowing totalled £1.8 billion in July, up from £1.07 billion in the same month a year earlier but down sharply from £12.78 billion in June. The ONS attributed the year-on-year increase to spending growth outpacing receipts, even as self-assessed income tax revenue remained robust. July borrowing typically runs lower than other months because of the timing of self-assessment receipts. Still, the actual figure exceeded the consensus forecast, which had anticipated an on-year decline to roughly £300 million.
Sterling and the Dollar
In the currency markets, the pound traded at 1.3625 US dollars on Friday afternoon, marginally below the 1.3634 level seen at Thursday’s equity close. Against the euro, sterling eased to 1.1672 from 1.1676. The euro itself slipped to 1.1673 dollars from 1.1678, while the dollar firmed against the Japanese yen to 159.03 from 158.87.
US Business Activity Hits 52-Month High
Across the Atlantic, Wall Street opened higher after the flash US composite PMI jumped to 56.0 points in August, a 52-month peak, from 54.5 in July. The improvement was anchored by the services sector.
“Jobs were added at the fastest rate since the start of last year as increasingly confident companies took on more staff to meet higher demand. Business growth expectations struck a nine-month high. Price pressures meanwhile moderated,” S&P Global noted in its commentary on the US data.
The Dow Jones Industrial Average rose 0.7 per cent, the S&P 500 gained 0.4 per cent, and the Nasdaq Composite added 0.3 per cent in Friday’s session.
Eurozone PMI Edges Higher; European Equities Advance
Private-sector activity in the eurozone also ticked upward in August. The flash composite PMI registered 52.1 points, up from 52.0 in July, with both the services and manufacturing components landing ahead of consensus. In European equity markets, France’s CAC 40 closed up 0.4 per cent and Germany’s DAX 40 advanced 0.6 per cent on Friday.
Bond Yields Stay Elevated as Treasury Intervention Fades
Fixed-income markets offered little relief. The yield on the US 10-year Treasury note widened to 4.74 per cent on Friday from 4.70 per cent at Thursday’s London equity close. The 30-year Treasury yield stretched to 5.27 per cent from 5.26 per cent. Enthusiasm for the US Treasury’s earlier intervention in the market had proven short-lived, keeping long-end yields under pressure.
“The relief offered by the intervention earlier in the week has proved short-lived,” said Dan Coatsworth, head of markets at AJ Bell, noting that underlying factors continued to weigh on the curve.
For investors tracking the UK, the week’s mixed tape — strong services PMI against soft retail sales and elevated borrowing — reinforces the view that the economy is navigating a period of uneven momentum. The services-led composition of growth, while supportive of equities, also raises questions about household spending resilience and the pace at which monetary policy can ease. With gold prices at multi-decade highs and bond yields remaining stubbornly elevated, the coming weeks will test whether the positive PMI signal translates into sustained equity strength or remains a one-off data-driven bounce.
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