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London - The pound was set for a weekly gain before the release of data that economists say will show the UK services sector contracted in July for the first time since records began in 2013.
Sterling advanced versus most of its 16 major peers on Friday before the report, which will be among the first to provide a glimpse into the economic effect of Britain’s decision to leave the European Union.
Markit Economics’ services Purchasing Managers’ Index dropped to 48.8 from 52.3 in June, according to the median forecast of analysts in a Bloomberg survey. The 50 level divides expansion from contraction of the industry.
A similar gauge is forecast to show that manufacturing output also shrank during the same period, according to a separate Bloomberg survey.
"Ultimately it’s businesses that make their decisions on employment, hiring and investment plans, " said Neil Jones, head of hedge-fund sales in London at Mizuho Bank "UK data has never experienced such close monitoring as it will be in the next few weeks."
The pound rose 0.1% to $1.3248 as of 7:41 a.m. London time, on course for a weekly gain of 0.4%. Sterling was little changed at 83.26 pence per euro. It has strengthened 0.5% versus Europe’s shared currency this week.
Markit’s manufacturing index is forecast to fall to 48.7 from 52.1 in June. The PMI surveys track output among UK services and manufacturing industries, as measured by purchasing managers.
The release on Friday examines the period after the Brexit vote on June 23. The data come in a week when inflation and labour market reports covering the period before the referendum mostly exceeded analyst expectations.
