Published on : Mar 16, 2015
There was a surprise fall in construction activities in Britain in January. This has increased fears of a broader slowdown across the important sectors of the nation’s economy.
The figures displayed show a drop of 5 per cent in new homes construction after the Christmas vacation. The data was released only days after the Office of National Statistics had said that there was a drop in manufacturing.
The declining output across the two sectors could prove to be highly embarrassing for George Osborne while he gets ready for a budget that will announce the agenda for elections in no more than two months.
Despite rebalancing efforts for the economy in terms of business investment and manufacturing, it has also come to rely on even more heavily on consumer spending and services that will drive the growth in the past few months.
To make matters worse for chancellor Osborne are the latest GDP statistics that show the growth in business investment had slowed in the previous quarter of 2014 to reach a rate that was last seen immediately after the 2009 meltdown.
Mark Carney, the governor of England, said in an earlier speech that there would be a delay in the rise in interest rates after the economic headwinds, which could carry on till 2016. The increase of sterling against the euro as well as other currencies has also affected the export business. Osborne had actually hoped the export business would expand at a rate faster than before, after the economy healed.