UK Construction PMI Slides to 3-Year Low
The British pound fell against the US dollar today after it was revealed that U.K. construction sector activity grew at its slowest rate in ten months last month, heightening fears over the health of the UK economy and somewhat quashing the case being put forward for higher interest rates.
The Markit construction purchasing managers’ index dropped to a reading of 54.2 for February, down the 55.0 reading of 55.0 recorded in the preceding month. This came after analysts had expected the index to tick up to 55.5, making it the slowest increase in total construction output since April 2015. House building grew at the slowest rate since June 2013, whilst construction firms took on staff at their weakest pace for two-and-a-half years.
The disappointing report comes just one day after a similar survey of the manufacturing sector showed that manufacturing activity in the UK dropped in February to its lowest rate in nearly three years. The soft data compounded the view that the Bank of England will be forced keep any interest rate rises on hold, keeping the rate at their record low for the foreseeable future.
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