- Kristin Forbes, a member of the MPC
British construction output unexpectedly fell in July, reversing a bounce in the previous month. The gauge posted a 1% decline, missing the estimate of the 0.5% pickup after an unrevised 0.9% rise in June. On an annual basis, the output dropped by 0.7%, compared with forecasts of the 0.6% rise. A major driver of the decline was a year-on-year fall in the amount of new housing being built, which decreased by 2.5%. At the same time, construction of public housing plunged by a hefty 15.6%, while the 0.8% growth in private construction was the slowest since March 2013 as well. However, the ONS did not revise the 0.2% growth rate it recorded for the sector in the second quarter, saying it would wait until more comprehensive annual statistical revisions for Britain's official data later this month.
Meanwhile, Kristin Forbes, a member of the MPC, warned in her Friday's speech that the BoE may have to increase its interest rate sooner than expected in order to fend off inflation. She also added that the movements in Sterling's exchange rate have been a key factor allowing the MPC to keep interest on hold, even though the domestic economy showed signs of solid recovery.
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