U.K. yields, pound rally after surprisingly strong PMI data

The yields on U.K. government debt and the pound moved firmly higher on Thursday after data showed the country's manufacturing sector rebounded sharply in August. The Markit/CIPS purchasing managers index jumped to 53.3 for the month, up from the 41-month low of 48.3 recorded in July following the Brexit vote. Analysts had expected the manufacturing PMI to climb to 49.6. "Certainly this is great news for the British economy and a sign that the Bank of England need not push for any further accommodation in the coming months. Indeed the report highlights that inflation is picking up fast as input costs increase," said Neil Wilson, markets analyst at ETX Capital, in a note. The pound jumped to its highest level against the euro in almost a month, trading at €1.1887, up from €1.1774 late Wednesday in New York. Against the dollar, sterling rose to $1.3252 from $1.3138. The yield on 10-year U.K. gilts climbed 6 basis points to 0.597%.

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