Sterling has strengthened enough to regain some of the ground it lost at the start of the week, but it was also given a kick following a much smaller than expected fall in the UK construction PMI data for July – a reading of 45.9 against a forecasted 43.8.

The construction sector is seen as being significantly vulnerable following the UK’s Brexit vote. Further to registering a 45.9 for July, down fractionally from 46.0 in June, the latest reading signalled the fastest overall decline in construction output since June 2009. This largely reflected the steepest fall in commercial building for over six-and-a-half years.

Survey respondents have noted that uncertainty following the EU referendum had dampened client confidence, led to greater risk aversion and encouraged a wait-and-see approach to decision making. That said, after taking into account the uncertain business outlook, there were also some reports that overall demand had been relatively resilient in July, especially for house building and infrastructure projects.

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Article by Sam Budd, Corporate Dealer
* Information courtesy of Currencies Direct
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