By Yasin Ebrahim
Investing.com – The pound slipped to nearly two-week lows against the greenback on Tuesday as construction activity fell to its lowest level ever as the nationwide lockdown brought activity to a halt.
The purchasing managers’ index for UK construction dropped to a reading of 8.2 in April, down from 39.3 the prior month, the lowest level since the survey began in 1997.
The fall in construction adds to a string of poor economic data seen this week, with the all-important services sector also deep in contraction.
The slip in the pound comes just a day ahead of the Bank of England meeting. The central bank is widely expected to keep rates on hold, but may tweak its bond-purchasing program and warn against the idea of a quick economic recovery.
The BoE last month unveiled a larger-than-expected GBP200 billion ($247 billion) quantitative-easing package, which for the “time being, gives policymakers plenty of scope to keep expanding the balance sheet,” ING said.
“We’d expect the Bank of England to also push back on the idea of a ‘V-shaped’ recovery this week,” it added.
ING estimates the UK economy will experience a 10% to 15% peak-to-trough fall in output, though said it wouldn’t be surprised if the bank penciled in a sharper decline.
Cable Slips Close to 2-Week Low Ahead of BoE Meeting
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