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GBP: UK construction activity shown to have contracted in September

By Callum Holmes October 4th, 2017

After Monday revealed that factory growth had slowed in September, attention turned to yesterday’s construction sector. Analysts had been expecting a reading of around 50.0 which, while not brilliant, would still have indicated some growth, albeit minor. However, when the figures were released they came in at 48.1 for September from 51.1 in August. PMI reported that the results were down to a weakening pound.

Such a slide is quite alarming and it shows that the UK’s building sector is shrinking for the first time since the result of the EU referendum. Sterling weakened against the US dollar and euro on the back of the release and, although it is worth noting that the pound is still stronger against the greenback than it was this time a month ago, it appears to be navigating a tightrope of uncertainty right now.

Later today we have the release of the services PMI and the markets will have both eyes trained on the numbers when they come in. Last time around they showed the slowest expansion in the services sector since September 2016, but a slow expansion is better than any contraction. Let us see what the figures are then…

 

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