Morning Forex Fundamental: GBP

Morning Forex Fundamental: GBP

'The figures are yet another indication that the U.K. economy has performed impressively over the summer months. It seems highly likely that the construction sector will provide another positive contribution to U.K. GDP in the third quarter of 2013.' - Tim Moore, senior economist at Markit

Activity at Britain's key construction sector expanded at the fastest pace in almost six years last month, mostly driven by residential building, survey from Markit showed Tuesday. A gauge of construction activity soared to 59.1 in August, hitting the highest since September 2007 and much higher from previous month's reading of 57.0, staying far above the 50 threshold, which separates growth from contraction. Analysts, however, expected a slight slowing in the pace of growth. The slowdown in Britain's economy during 2009 had an enormous downward impact on construction sector, with output in the sector falling as much as 19%. In the first three months of 2013 output fell 1.8%, contrasting with a 0.3% GDP growth and becoming the largest drag on the economy. However, the sector recorded a solid revival in output during the second quarter, and the signs of a tentative recovery in all sectors should encourage investors to increase spending, boosting the economy further.

Another bright spot for the U.K. economy came out on Tuesday, as the British Retail Consortium published a survey, showing domestic retailers enjoyed a healthy pace of sales during the last month, as total retail sales values advanced 1.8%. Even though, it was lower than the 3.9% growth recorded in the preceding month, however, it is so only due to exceptionally strong July, when sales soared most since 2006.