Investing.com - The pound remained slightly lower against the dollar on Tuesday after data showing that activity in the U.K. service sector picked up slightly in March, but remained subdued.
GBP/USD was last down 0.23% at 1.4227 from around 1.4220 ahead of the report.
The Markit services purchasing managers index came in at 53.7 in March, up from February’s near three year low of 52.7 and matching economists’ expectations.
On the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.
Despite the slight advance from February levels, March rounded off the weakest quarter of output growth in the British services sector since the first quarter of 2013.
The data also revealed the slowest increase in new business since January 2013.
Global economic uncertainty and the upcoming European Union membership referendum weighed on business confidence, the report said.
The lackluster data indicated that the Bank of England will be in no rush to raise interest rates.
"It therefore seems unlikely that March’s upturn in the pace of growth represents the start of a longer term upswing,” Chris Williamson, chief economist at Markit said.
“In contrast, the survey data suggest growth is more likely to weaken further in the second quarter. With the PMI already in territory traditionally associated with the Bank of England choosing to loosen policy, interest rate hikes seem a long way off.”
Sterling was slightly lower against the euro, with EUR/GBP easing up 0.13% to 0.7991.
In the euro zone, data on Tuesday showed that private sector activity barely picked up in March, indicating that the European Central Bank’s stimulus program is not yet having much effect.
Service sector activity edged lower, with the bloc’s services index ticking down to 53.1 from 53.3 in February and lower than the preliminary estimate of 54.0.
The composite index, which measures manufacturing and service sector activity, came in at 53.1, up from 53 in February but lower than the initial reading of 53.7.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.12% at 94.7, holding above last Thursday’s five-and-a-half month lows of 94.31.