What's going on?

On Tuesday, newly published surveys of business activity in the UK and the eurozone suggested that their respective economies are headed down somewhat different paths in the first few months of 2018.

What does this mean?

Data from January pointed to a slowing pace of growth in the UK�s service sector, primarily due to weakening consumer demand and business concerns surrounding the UK�s exit from the EU. Britain�s construction firms and manufacturers also reported a slowdown in growth.

Meanwhile, in euroland, the economy continued its recent march upwards. There, the services sector saw business activity accelerate at its strongest pace in over a decade, while manufacturing activity in the eurozone is hovering around all-time highs.

Why should I care?

For markets: The euro climbed against the pound following the news.

The euro has gained over 10% against the pound in the past two years, thanks to negative speculation regarding the outcome of Brexit and a quickening Euroboom. The euro has also been gaining against the dollar lately, and its rise against both major currencies hasn�t been great for eurozone companies� stocks (as their earnings are worth less in euro terms).

The bigger picture: Another divergence between the UK and the eurozone related to inflation.

While UK firms� input prices (a.k.a. how much they need to spend to make their products) rose sharply in the aftermath of the Brexit referendum, thanks to the declining value of the pound, those pressures have now leveled off somewhat. Input prices for companies in the eurozone are increasing, however, as overall demand outstrips supply � and that�s likely to stoke higher inflation in the eurozone, potentially forcing the European Central Bank to accelerate its plans to withdraw its support for the economy.