"We expect input prices to rise significantly in 2017 which will put financial pressure on an industry just about managing on squeezed margins and fixed-price contracts".
- Paul Trigg, Euler Hermes
UK construction industry grew at its fastest pace in six months in October despite the post-Brexit uncertainty, official data revealed on Wednesday. Markit/CIPS said its Construction Purchasing Managers' Index for Britain jumped unexpectedly to 52.6 points last month, up from September's 52.3 points, while market analysts anticipated a slight deceleration to 51.9 in October. Any reading above the 50 point-level indicates an expansion in the construction sector. Overall, even though these numbers were better than expected, the outlook for the British construction sector remains weak amid declining new orders and rising costs. Back in June, the Construction PMI slipped into contractionary territory following the UK's vote to leave the European Union, falling to 46.0 from May's 51.2 points, the lowest level since the global financial crisis. The weak Sterling is expected to force the Bank of England to revise upwards its inflation forecasts during the November policy meeting on Thursday, but it is not expected to cut interest rates further. After the release, the British Pound rose slightly against other major currencies, trading at 1.12263 against the US Dollar, 127.07 against the Japanese Yen and 0.9036 against the Euro by on the London Stock Exchange.
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