UK August manufacturing PMI index was slightly softer than expected

The UK August manufacturing PMI index was slightly softer than expected at 51.5 (consensus 52.0), though the undershoot is modest given the global turmoil that was the background to the survey and the headline index is in the middle of its recent range. Despite Carney reiterating that the rate debate will come into sharper focus around year-end at Jackson Hole, markets continue to attach a near-zero probability to a hike on that time horizon and a full hike is not priced for another 12 months. 

If the rest of this week's data (including this afternoon's construction PMI, and most importantly services PMI tomorrow) continue to show the UK economy robust to global events, a repricing of UK rate prospects should help GBP recoup losses against EUR.