Key facts
- British Pound futures declined significantly.
- US proposed additional tariffs of 10% to 12.5% under Section 301.
- UK manufacturing PMI for May reached a four-year high of 53.9.
- UK services PMI fell to 49.3, below the 50 threshold.
- The Bank of England is set to make a rate decision on June 18.
British Pound futures experienced a significant decline, closing near their daily lows. This downturn occurred despite the release of positive UK economic indicators, including a final manufacturing PMI for May that reached a four-year high of 53.9. However, the services PMI came in at 49.3, falling below the 50 threshold which signals a contraction and indicates softening momentum. The market sentiment was further dampened by a new US proposal to introduce additional tariffs ranging from 10% to 12.5% under Section 301, with the UK specifically placed in the 10% tier. The upcoming Bank of England rate decision on June 18 also contributed to market caution.