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UK Construction hits a 14 month low

British construction companies reported the sharpest fall in activity since just after June 2016’s Brexit vote, as new work dried up last month on concern over the economic outlook.

The IHS Markit/CIPS construction purchasing managers’ index (PMI) sank to 48.1 in September from August’s reading of 51.1, far below all forecasts in a poll of economists and its lowest since July 2016.

British manufacturing growth cooled last month as cost pressures lurched higher, according to a survey that could put the Bank of England a step closer to raising interest rates, despite a murky outlook ahead of Brexit.

Monday’s IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 55.9 from a downwardly revised 56.7 in August, undershooting the consensus of 56.4 in a Reuters poll of economists.

Official economic growth figures published last week showed manufacturing output contracted 0.3 percent in the second quarter compared with the first quarter.

Britain’s economy has suffered its weakest growth so far this year since 2012, with consumers bearing the brunt of a rise in inflation largely caused by the pound’s tumble after the June 2016 Brexit vote.

Now, the BoE appears poised to reverse some of this. Earlier this month, the central bank said most of its policymakers expected to raise interest rates in the coming months, if growth and inflation pressures develop as they expect.

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