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The UK’s S&P Global Construction PMI dropped to 44.1 in October, well below expectations of 46.7 and down from 46.2 in September, marking the steepest decline since March. Activity weakened across housing and commercial construction, while civil engineering saw only limited resilience. Higher borrowing costs and subdued demand continue to weigh heavily on the sector, pointing to sustained pressure on investment and building activity.

Market impact: Negative for GBP; deeper contraction in construction highlights the drag from high interest rates and weak property demand.

The Bank of England (BoE) kept its key interest rate unchanged at 4.00% in November, in line with expectations. The Monetary Policy Committee (MPC) vote showed a 4–5 split, with four members favoring a rate cut, none supporting a hike, and five opting to hold steady. The decision underscores growing divergence within the committee as inflation continues to ease but growth remains sluggish. Policymakers emphasized the need to balance disinflation progress with lingering wage pressures.

Market impact: Neutral for GBP; steady rates were expected, but the increased number of dovish votes could weigh on short-term sentiment for the pound.

UK labour market data for September showed signs of cooling. The unemployment rate climbed to 5.0%, up from 4.8%, while employment fell by 22,000 over the three months to September. Claimant count rose sharply by 29,000 in October, signaling increased jobless claims. Wage growth continued to ease, with average earnings including bonuses rising 4.8% (down from 5.0%) and ex-bonus pay steady at 4.6%. The figures suggest that labour market slack is building as higher borrowing costs weigh on hiring and demand.

Market impact: Negative for GBP; rising unemployment and slowing wage growth may reinforce expectations for earlier monetary easing by the Bank of England.