UK, June 13, 2017. The situation of the British economy, and in particular the construction sector, is of prime concern to us. For this reason, we have summarized the latest news published by Reuters below. Growth in Britain’s construction industry accelerated to a four-month high in April, adding to tentative signs that the economy might be recovering a little momentum after a lacklustre start to 2017. The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) rose to 53.1 from 52.2 in March, against forecasts in a Reuters poll of economists for a slight fall.
Civil engineering grew at the fastest pace in just over a year and growth in house-building hit a four-month high.
The figures followed a similar survey published on Monday that showed British factories had their best month in three years in April. The readings should come as a relief for Prime Minister Theresa May as she gears up for a national election on June 8. Official data last week showed the economy slowed sharply in the first three months of the year as inflation hurt consumers. Wednesday’s release showed construction companies took on workers at the fastest rate since May last year to help cope with an influx of new orders, while cost pressures on firms eased further after hitting six-year highs earlier in 2017.
Bank of England officials are due to meet next week to set interest rates, with some policymakers uneasy about the risk of inflation becoming entrenched in the economy.
The construction sector was much weaker than expected too.
After last year’s shock decision by voters to pull Britain out of the European Union, Britain is now facing more political upheaval after May’s unexpected failure to win a parliamentary majority. “There is clearly a risk that today’s election result causes growth to weaken towards the end of the second quarter,” Ruth Gregory, an economist with Capital Economics, said. “That said, this is unlikely to spell disaster since the economy has proved pretty resilient to political uncertainty in the recent past.”
Britain’s economy slowed sharply in the first three months of 2017, making it the worst performer among the Group of Seven nations after outpacing its peers in 2016, despite the shock of the Brexit vote. As well as rising inflation and slow wage growth weighing on consumers, the economy now has to contend with heightened political uncertainty about Britain’s ability to proceed with its plan to leave the European Union.
Britain’s economy grew by a below-par 0.2 percent in the three months to May, the National Institute of Economic and Social Research, a think tank, said on Friday. “The subdued performance in the economy throws the political turmoil of a hung parliament into sharp relief,” NIESR director Jagjit Chadha said. “People are looking for answers to low levels of economic growth, limited improvements in productivity and falling real wages.”
The ONS said construction output in April fell by 1.6 percent from March and was down 0.6 percent on the year. The Reuters poll had pointed to growth of 0.3 percent on the month but a fall of 0.4 percent compared with April last year.
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