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Sterling holding its recent gains against the Euro

The UK also records an unexpected budget surplus in January..
The latest round of UK PMI data wasn't the only thing that came as a surprise to markets yesterday. Public sector borrowing was surprisingly in surplus last month and by some margin in the end.

A -£6.95Bn reading was expected, but £5.4Bn was recorded and showed tax receipts outstripping spending for the month. It offers Chancellor Hunt the opportunity to provide further support at next month's budget.

In terms of economic data, February has followed last month in delivering overall better than forecast news for the UK. No-one seems to be offering any economic collapse views anymore and stagflation seems a thing of the past too.

We still expect to see GBP higher in H2 and even sooner if the data stays consistent. A quiet day expected on the market today, but the next two-days may seem some volatility with US data and BoE member speeches.