Sterling Unmoved on As-Expected UK Construction Data
The UK purchasing managers’ index for construction fell in May to 54.4 from 55.8 in April, Markit economics said today. The decline came in line with expectations. The index gauges industrial sentiment by surveying major players in the industry.
UK PMI construction reached a 21-month high of 56.7 in March before falling in April, and a reading above 50 indicates an expanding market. The data is part of a string of reports used by the Bank of England in policy decisions aimed at stimulating economic growth and managing inflationary pressures.
Referencing current political instability in the Eurozone, BoE Governor Mervyn King recently said that growth prospects in the UK are now lower than they were three months ago, adding that the UK cannot qualify the damage that would be done by a breakup of the Euro. Mr. King added that even the threat of Euro-area risk is enough to slow UK growth.
The British Pound remained stable after today’s release and was well supported against the US Dollar after recent weakness since the beginning of May.
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