Building sector bounces back in UK
Britain's construction industry largely recovered in August from a downturn that started just before June's vote to leave the European Union, according to a survey yesterday that added to signs the economy is stabilising.
The latest Markit/CIPS UK Construction Purchasing Managers' Index (PMI) rose to 49.2 from 45.9 in July, beating all forecasts in a Reuters poll but remaining below the 50 mark dividing growth and contraction.
The construction survey follows a surprisingly upbeat manufacturing PMI on Thursday, which could prompt the Bank of England to rethink the need to cut interest rates again this year.
Sterling rose to a one-month high against the euro after the construction data and British shares also rallied.
"The near-stabilisation in construction activity in August... adds to the mounting evidence that the economy has so far held up pretty well following June's Brexit vote," economist Howard Archer from IHS Global Insight said.
Overall construction activity - which accounts for about 6pc of the economy - nevertheless declined for a third straight month.
Economists will also be concerned by the strength of inflation pressures now facing builders. (Reuters)