Forex - Pound comes off all-time low against euro after strong services PMI

LONDON (Thomson Financial) - The pound came straight off a fresh all-time low against the euro after a key UK service sector survey came in much stronger than expected, cementing expectations the Bank of England will hold off cutting interest rates tomorrow.

The Chartered Institute of Purchasing and Supply's services PMI jumped to 54.0 in February from 52.5 in February, its highest level since September 2007. Analysts had expected the survey to drop to 52.2.

However the BoE will be alarmed to see the output and input prices sub-index both climbed to their highest level since the survey began, reinforcing their concerns about a strong uptick in consumer inflation over the coming months.

At 9.34 am GTM the euro was trading at 0.7667 stg, having hit an all-time high of 0.7689 stg seconds before the data was released. Against the dollar the pound climbed to 1.9770 usd from 1.9710 usd just before.