UK pound is heading lower today, dropping as additional disappointing economic data comes in. This time, it’s construction declines weighing on the British currency. Concerns about the economic recovery in the United Kingdom are sending the pound lower today, even though sterling saw some progress earlier.
Good news coming out of the United Kingdom was mostly priced in, so the latest construction data was particularly disappointing. Construction fell 0.1 per cent from July to August, thwarting analysts in their expectations of a gain of 0.8 per cent. Additionally, the Bank of England is keeping its asset purchase program in place, and that is causing some weakness in the pound as well.
Even with the construction drop, there are are some increases in home building. Private home building is up 1.6 per cent, and that is helping a little bit. However, it’s not enough to boost the UK pound at this point. There are also concerns that home prices have been supported by the Help-to-Buy program championed by David Cameron. There are worries about a bubble in home prices, and concerns about what happens if the asset purchase program is withdrawn.
At 15:24 GMT GBP/USD is down to 1.5951 from the open at 1.5967. EUR/GBP is up to 0.8500 from the open at 0.8465. GBP/JPY is up to 156.8250 from the open at 156.7250.
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