U.K. Construction Growth Unexpectedly Accelerated in January

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U.K. construction growth unexpectedly accelerated last month as housing strengthened and civil engineering bounced back from a contraction.

Markit Economics said its Purchasing Managers’ Index rose to 59.1 from 57.6 in December. A reading above 50 indicates expansion. Economists forecast the gauge would fall to 57, according to the median estimate in a Bloomberg News survey.

The report adds to signs of strength in the economy after Markit’s gauge of manufacturing also rose in January. Bank of England policy makers meeting this week will probably keep the key interest rate at a record-low 0.5 percent amid easing inflation.

“The peak speed of the construction recovery seems to be over, but reports of its death have been greatly exaggerated,” said Tim Moore, an economist at Markit in London. “The latest survey highlighted that lower fuel and energy prices helped drive down overall cost inflation to its lowest for just under two years.”

An index of house building rose to 59.8 in January from 59.2 in December, Markit said, adding that there was a “robust rise in commercial construction.”

The pound was trading at $1.5014 as of 9:50 a.m. London time, down 0.2 percent on the day.