- Tim Moore, senior economist at Markit
Growth in the UK construction industry unexpectedly slowed in July, hurt by sluggish housebuilding and civil engineering. The Markit/CIPS UK construction PMI declined to 57.1 after reaching 58.1 in June, the highest level in four months. Construction data showed housebuilding activity rose at the slowest pace since April, marking one of the weakest growth rates since mid-2013 and underlining the challenge that policy makers face in dealing with the UK's chronic housing shortage. Lack of new housing and sharply increasing demand due to historically low rates continue to push house prices upward. According to the BoE's latest credit report, the number of secured loans for house purchases approved in June surged to 66,582, compared with an upwardly revised 64,826 loans approved in May, while the volume of mortgages was the highest since 2008. The government last month announced a plan to remove obstacles to building new houses.
The UK's overall economic performance improved in the second quarter as GDP rose to 0.7% between April and June, up from 0.4% in the beginning of the year. The increase in services sector output was the main upward drivers. Significant support also came from a highly volatile oil and gas output from the North Sea, surging the most since 1989.
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