The latest statistical data from the UK has missed analysts’ expectations. The Markit/CIPS UK Construction PMI reading for April was 54.2 compared with 57.8 in March. The data follows the poor Manufacturing PMI for April and the weak Q1 preliminary GDP estimate.
The Markit release highlighted that despite the slower rise in new orders, there was a robust pace of job creation, which has put further pressure on sub-contractor availability. The pressures on labour availability could trickle through to wage inflation, which would be welcomed with inflation at zero.
The back-to-back weak indicators could be a significant blow to the Conservative Party with just days until the UK general election. The party is campaigning on a platform of fiscal prudence and a strong economy; however the most recent indicators show a stutter in the recovery.
Sterling had rallied in the FX market in the final weeks of April, recovering from a 5-year low against the USD. The analyst consensus is that the political uncertainty should be a negative for the currency, with the expectation of no outright government majority, and a number of potential outcomes. With two days until voters head to the ballot box, Sterling has weakened to below 1.5100 this morning after the data release (session low: 1.5088).