Last Friday, we learned that UK construction output fell by 0.9% in July, the fourth consecutive monthly fall and below the 0.2% slide predicted by economists. On the plus side, industrial output rose by 0.2% and exports of UK-made goods to the EU rose by 4.4% in the three months up to July. The stronger-than-expected manufacturing figures strengthened sterling against the euro and also helped it hold on to the recent gains against the US dolla.
After a relatively quiet week for UK economic data, this one is much busier. On Tuesday, we have inflation data and retail price data due to hit the wires; Wednesday sees the releases of jobless claims and unemployment rate; but Thursday is the one the markets will be watching most intently, with the Bank of England due to meet. We’ll have a decision on whether interest rates are going to be raised and an update on the quantitative easing programme. We can be fairly confident there will be no rate hike, but it will be interesting to see what the voting numbers are.
Finally, the chart below shows sterling movements against the euro over the course of the past month. It makes for interesting viewing.