* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh * Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv (Updates prices, adds) LONDON, Sept 6 (Reuters) - Sterling slipped on Monday, pulling back from near one-month highs against the dollar and one-week peaks versus the euro as signs grew that economic gains from post-lockdown reopenings were starting to fade. The currency had firmed on Friday against the dollar after data showed the United States created far fewer jobs in August than forecast. But subsequent moves have been listless as traders await further cues on the British economy and the Bank of England’s future policy direction. IHS Markit’s construction Purchasing Managers’ Index (PMI) showed the UK construction industry grew last month at its weakest pace since the lockdown of early 2021, hit by a severe shortage of building supplies. Friday PMI data had showed growth in the services sector slowed down in August compared with July. Both surveys hardened indications of slowing economic growth, after a strong rebound triggered by the country’s rapid vaccine rollout earlier in the year. They also revealed that economic momentum is stuttering under the impact of Brexit, global supply chain issues and COVID isolation rules. By 1500 GMT, sterling was down 0.3% at $1.38200, off the near one-month high of $1.38905 touched on Friday. Versus the euro, it likewise slipped to 85.82 pence, having risen to 85.595 pence on Friday. “The major gains from the UK economy’s reopening have been realised. Growth is likely to continue to ‘normalise’ through the third quarter, though for the quarter as a whole we still look for GDP growth of 2.7% quarter-on-quarter,” Morgan Stanley analysts told clients. They predicted data due on Friday would show a 0.6% monthly expansion in July. Meanwhile, Prime Minister Boris Johnson’s plan to hike taxes to fund social care has provoked fury among many of his own lawmakers, who fear it will alienate voters. Monday’s survey also showed input cost inflation was the second-fastest since records began in 1997, with rises in subcontractor rates at a new high. The Bank of England expects inflation to rise sharply this year and hit a peak of 4%, but it also thinks price growth will cool as problems caused by the reopening of the economy pass. Traders will listen for clues in a Tuesday speech from Michael Saunders, the only Monetary Policy Committee member who voted in August for an early end to the bank’s 895-billion-pound asset purchase programme. Reporting by Sujata Rao; Editing by Hugh Lawson and Mark Heinrich Our Standards: The Thomson Reuters Trust Principles.
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