Investing.com - The UK construction sector expand more than expected in October, easing fears over the economy and increasing the chances of a Bank of England rate hike, industry data showed on Thursday.
Market research firm Markit said that its UK construction purchasing managers' index rose to a seasonally adjusted 50.8 last month from a reading of 48.1 in September. Economists had expected the index to stay flat in October.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Business conditions remained subdued however, with growth only coming from housing construction. Confidence among firms over the next 12 months was at its lowest since December 2012.
“Greater house building was the sole bright spot in an otherwise difficult month for the construction sector. Sustained declines in civil engineering and commercial activity meant that large areas of the building industry have become stuck in a rut," said Tim Moore, Associate Director at IHS Markit and author of the report.
Lack of confidence in the UK economy and few new jobs in the pipeline has also lead to a decline in staff recruitment, he added.
GBP/USD was trading at 1.3251 from around 1.3241 ahead of the release of the data, while EUR/GBP was at 0.8780 from 0.8789 earlier.