Data released by the Office for National Statistics (ONS) today indicated that construction output grew 5.5% in February but, when compared to year-on-year trends over the same time period, the construction sector has normally reported much sharper growth. The weak figures have been partly blamed on the colder than average weather.
According to an optimism survey by accountancy firm BDO, British businesses do not anticipate overall economic growth however they do expect to increase hiring. The report also indicates that both the optimism and output indices remain below 95 points which is the demarcation between grown and contraction suggesting that the economy could already be in a third recession.
Despite poor economic data last week, the FTSE closed up 0.5% or 27 points today at 6,276.96 ahead of the start of the US results season. France’s CAC and Germany’s DAX also closed up slightly having lost most of their gains towards the end of trading.
In an effort to contain the fraud scandal that has rocked the Government, French Finance Minister Pierre Moscovici has announced that the country will look to reinforce the exchange of banking information in Europe. France aims to base the new rules on the American Foreign Account Tax Compliant Act (FATCA) which has been in place since 2010, requiring foreign financial institutions to provide tax information on transactions.
Despite a new remit allowing more leeway to disregard above-target inflation, the Bank of England (BoE) has decided not to put more money into the economy at this time however, after Chancellor George Obsorne gave the BoE stronger backing recently, this may change in the near future. Interest rates currently remain at the record low 0.5%.