UK data: traders pare back expectations for BoE tightening - Scotiabank

Analysts at Scotiabank noted that the key UK Services PMI data showed a pick-up in activity in Apr, with the index advancing to 52.8 in the month, from 51.7. 

Key Quotes:

"However, the report failed to match market estimations of a gain to 53.5. Investors continue to pare back expectations for BoE tightening – not just for the looming May meeting but beyond as well."

"In addition, we think the GBP is facing some near-term political risk, with today local elections in England possibly delivering more bad news for PM May just as the Prime Minister is struggling to formulate a coherent Brexit policy with a defiant Cabinet. Sterling has steadied but we don’t necessarily believe downside risks have eased."