London Markets: Pound slumps after construction sector sees worst decline on record
FTSE 100 bucks weaker European markets
The British pound fell sharply on Wednesday, following data that showed a collapsing construction sector as the country remains largely locked down due to its coronavirus epidemic.
tumbled 0.7% to $1.2348, bringing the currency’s losses to more than 1% for the week. Many big U.K. companies generate the bulk of sales outside of the country, so stock prices rise when the pound falls. The FTSE 100 index
rose 0.5% to 5,881.87, bucking weaker markets across Europe.
The seasonally adjusted IHS Markit/Chartered Institute of Procurement & Supply (CIPS) U.K. construction total activity index fell from 39.3 in March to 8.2 in April, signalling a fast downturn in overall construction output. It was the lowest reading since the collection in April 1987. The decline was much bigger than expected,
“For a sector still not fully recovered from the skills shortages created by the financial crisis in 2008, the vacuum of output created by the pandemic has knocked the sector back another decade,” said Duncan Brock, Group Director at the CIPS, in a press release.
The data comes a day ahead of forecasts due to be published for the months ahead by the Bank of England, which is expected to lay out a dire prognosis. But it may not add to the stimulus package it has already laid out to help the economy.
Drug stocks provided support for the index with shares of AstraZeneca PLC
rising 3% after the drugmaker said its heart failure treatment, Farxiga, has been approved by the U.S. Food and Drug Administration.