"The latest survey suggests that the U.K. construction sector has expanded by more than 1% over the second quarter of 2014"
- Tim Moore, Markit's senior economist
The economic data from the U.K. continues to surprise analysts and markets to the upside, driving the Pound to new highs. On Wednesday market research firm Markit and the Chartered Institute of Purchasing & Supply said activity in the Britain's construction sector increased for a 14th straight month in June, powered by house building, while commercial construction also rose from May. Construction PMI climbed to a seasonally adjusted 62.6 last month compared to a reading of 60.0 in May, while economists had projected a decline in index to 59.5 in June. The headline index has been above the 50 threshold fir 14 months and the latest data signals the strongest pace of overall output growth since February. The construction data showed the fastest pace of hiring in the sector since 1997. Residential house-building was once again the top performer among construction sectors in June, with activity rising at the fastest pace since January. Following the release of data the Pound strengthened versus the U.S. counterpart, with GBP/USD inching higher 0.14% to trade at 1.7176, the highest since October 2008 and up from 1.7151 ahead of data.
The equivalent manufacturing survey earlier this week also overshot forecasts, driving the Pound to the highest level in almost six years and bolstering speculations that the Bank of England would hike interest rates this year.
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