Pound Strengthens Against Euro After U.K. Services Data Exceeds Forecasts

The pound strengthened against the euro and the dollar after a report showed a measure of U.K. service industries exceeded economists’ forecasts in June, alleviating concerns about the recovery.

Sterling advanced versus all but one of its 16 major peers monitored by Bloomberg, climbing most against the yen. A gauge of U.K. services growth based on a survey of companies rose to 53.9 from 53.8 in May, Markit Economics Ltd. and the Chartered Institute of Purchasing and Supply said today in a report. The median forecast of 26 economists polled by Bloomberg predicted a decline to 53.5. A level above 50 indicates expansion.

“The focus from the market right now is very much on the growth numbers, and positive data outcomes will tend to be supportive of sterling,” said Chris Scicluna, deputy head of economic research at Daiwa Capital Markets Europe in London.

The pound appreciated 0.7 percent to 89.80 pence per euro as of 1:09 p.m. in London, the first time in three days that it has traded stronger than the 90 pence level. Sterling rose 0.1 percent to $1.6099, a third consecutive day of gains.

The pound has slumped this year against 12 of 16 major currencies tracked by Bloomberg as Conservative Prime Minister David Cameron’s austerity measures to shrink the budget deficit crimp growth and inflation squeezes incomes at the fastest pace since the 1970s. Efforts to eliminate the bulk of the fiscal shortfall by 2015 involve the deepest spending cuts since World War II and more than 300,000 state-employee job losses.