- Tim Moore, Markit
UK construction sector recovered in May from the lowest level in almost two years in April. The Markit/CIPS UK construction PMI bounced back to 55.9 in the reported month from April's 22-month low of 54.2. Optimism among UK construction companies rose to a nine-year peak last month after Prime Minister David Cameron unexpectedly won the general election with an outright majority, and growth in the sector rebounded from a slowdown. The PMI also showed construction firms employed staff at the fastest pace in five months during May. However, Markit said it was unclear if the uptick in confidence would translate into increased output volumes, highlighting that all parts of the construction industry have lost traction over the past 12 months, even after taking May's PMI rise into account.
Meanwhile, according to New Economics Foundation, British think-tank, the UK's financial system is the most vulnerable among the G-7 economies, and only structural reforms can help protect it from another financial disaster. The report reveals that the regulatory changes implemented since the 2008 banking crisis have been insufficient and a threat of upheaval still persists. Among the main reforms that the NEF recommends are a full separation of high street banks from investment banks, and more competition in the banking sector.
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