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(CEP News) Frankfurt - The UK purchasing managers index for construction fell to a record low of 29.3 in December, down from both the 30.5 level expected and November's 31.8 figure, Markit Economics reported on Monday.
"The purchasing managers' survey indicates that the construction sector's recession deepened markedly in the fourth quarter after output contracted by 0.2% quarter-on-quarter in the third quarter of 2008 and by 0.7% in the second quarter," IHS Global Insight chief economist Howard Archer said. With the construction downturn adding to the mounting evidence that the UK economy experienced an even sharper decline in the fourth quarter of 2008 than in the previous period, Archer said the Bank of England would be under increased pressure to cut its Bank Rate further and expects a 75bp reduction on Thursday. "While an even bigger cut could well occur, we suspect that the MPC may well prefer to moderate the pace at which it is cutting interest rates as they near zero and to allow the previous large cuts more time to feed through and take effect," Archer said. Written by CEP News European Staff in Frankfurt,
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, edited by Nancy Girgis,
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