Pound falls to a 6 week low against the euro

The pound has now fallen to a 6 week low against the euro on the publication of mixed UK construction output. The data from the Office for National Statistics (ONS) showed a decline activity from July to August but activity is still at a higher level than in the same period last year.

Of interest, new housing starts jumped by 16.7% while infrastructure dropped by 5.5% compared to a year earlier. New housing now accounts for 32% of all new work while infrastructure accounts for just 19%.

Analysts commented that the growth in home building suggested that government schemes such as ‘Help to Buy’ have, as designed, bolstered the industry. The UK government has only this week launched the second phase of its mortgage guarantee programme to spur boost further house building by providing first time buyers with help with obtaining finance for their first house move.

Meanwhile, unofficial trading in shares in the Royal mail will get underway today ahead of next Tuesday’s official launch. The shares have been priced at £3.30 but no private investor who applied for shares will get more than £749.10 and those who applied for more than £10,000 will get none!

The timing of the Royal Mail share offer was boosted by the overnight news from Washington that seems to suggest progress is finally being made on resolving the US government shutdown, now well into its second week and averting a possible debt default next Thursday, 17 October.