UK construction hit by worst run since global financial crisis
Britain’s construction sector has recorded its worst run since the financial crisis almost two decades ago, with housebuilding mired in the deepest slump since the start of the Covid pandemic in 2020,UK construction output shrank for the 12th month in a row in December, the longest unbroken run of declines since the global financial crash of 2007-09, although there were signs of optimism among companies, according to a monthly industry survey,The purchasing managers’ index (PMI) from S&P Global and Cips had a headline reading of 40,1 in December, close to its five-and-a-half-year low of 39,4 in November.
Any reading below 50 indicates contraction,Economists had predicted a slight improvement, to 42,5,“UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November,” said Tim Moore, an economics director at S&P Global Market Intelligence,“Many firms cited subdued demand and fragile client confidence.
Despite a lifting of budget-related uncertainty, delayed spending decisions were still cited as contributing to weak sales pipelines at the close of the year,”The housebuilding subindex dropped to 33,5, the lowest since May 2020, when building sites were closed down after the Covid outbreak prompted the UK government to declare a nationwide lockdown,The housing secretary, Steve Reed, acknowledged last month that a sharp increase in housebuilding was needed to meet Labour’s promise to build 1,5m new homes in England over five years.
Housebuilders have predicted that the government will miss its ambitious target.Output in the commercial sector also fell at the fastest pace in more than five and a half years in December, with the index at 42.While the downturn in civil engineering eased, it remained the weakest sector, reflected by a reading of 32.9.However, construction companies became more optimistic about the outlook for the coming 12 months, and confidence hit its highest level since July, helped by the prospect of lower borrowing costs as well as the lifting of uncertainty about the contents of Rachel Reeves’s November budget.
The study showed 37% of companies polled predicted a rise in output levels during the year ahead, compared with 20% that forecast a decline,Rising infrastructure spending and weaker inflationary pressure also prompted hopes of a turnaround,New orders and employment declined in December, but to a lesser extent than in November,The all-sector PMI – which comprises services, manufacturing and construction reports for December – edged up to 50,4 from 50.
1 in November, pointing to a small expansion across the economy.Elliott Jordan-Doak, the senior UK economist at Pantheon Macroeconomics, said: “We expect the construction PMI itself to remain subdued in the coming months, given how entrenched negative sentiment appears to be within the sector.“Moreover, there are few reasons for businesses in the construction sector to be more cheerful.The budget’s prioritisation of higher welfare spending rather than investment will come as a disappointment to many builders, and the boost to activity from falling interest rates will be modest this year.“Meanwhile, the chancellor’s mansion tax will exert further downward pressure on the housing market.
So, we expect only modest growth in construction sector activity in 2026, with risks tilted to the downside.”From April 2028, the government will introduce a high-value council tax surcharge – which has been labelled a “mansion tax” – for properties worth more than £2m in England, of £2,500 a year, rising to £7,500 for properties worth more than £5m.However, this was not as sizeable as feared by some.UK house prices fell unexpectedly in December but have been tipped to rise as much as 4% this year by Nationwide building society.First-time buyers are expected to drive the housing market this year.
‘Go back home’: Farage schoolmate accounts bring total alleging racist behaviour to 34
Thirty-four school contemporaries of Nigel Farage have now come forward to claim they saw him behave in a racist or antisemitic manner, raising fresh questions over the Reform leader’s evolving denials.One of those with new allegations is Jason Meredith, who was three years below Farage at Dulwich college, a private school in south-east London. He claims that Farage called him a “paki” and would use taunts such as “go back home”.Meredith, 58, who is of Anglo-Indian heritage and has lived in Switzerland where he works as a product manager since 1999, said it was support for anti-racism that motivated him to come forward.He told the Guardian: “What really irked me was the denial [by Farage] of being racist
Farage accused of ‘parroting Kremlin lines’ after remarks on UK troops in Ukraine
Nigel Farage has been accused of “parroting Kremlin lines” after saying that he would vote against any UK government plans to deploy the military in Ukraine.On Tuesday, Britain and France said they would be ready to send troops to Ukraine after a peace deal, but the Reform UK leader said he would vote against any such move to put boots on the ground.Farage’s comments cast doubt on his commitment to the UK’s national security, the cabinet minister Pat McFadden said. He accused the politician of taking a pro-Russia stance on the issue, which he said should give voters “pause for thought”.“This guarantee is not just for Ukraine, it’s for the whole of Europe,” he said
Mandelson accuses European leaders of ‘histrionic’ reaction to Trump’s Greenland stance
Peter Mandelson has accused European leaders including Keir Starmer of a “histrionic” reaction to Donald Trump’s plan to take over Greenland, arguing that without “hard power and hard cash” they will continue to slide into unimportance in the “age of Trump”.In his first political comments since being sacked as Britain’s ambassador to Washington last year, Lord Mandelson said Trump had achieved “more in a day than orthodox diplomacy was able to achieve in the past decade” when he captured the Venezuelan president, Nicolás Maduro.The intervention is likely to be seen as a criticism of the British prime minister, who has attempted to walk a diplomatic tightrope since the US captured Maduro. This week he signed a statement calling on the US president to respect Danish sovereignty over Greenland after a White House statement said the US was looking into “a range of options” in an effort to acquire Greenland, adding that using the US military to do so was “always an option”.On Wednesday evening, Starmer “set out his position on Greenland” in a phone conversation with Trump, Downing Street said without giving further details of the call
Reeves condemns Farage opposition to lifting two-child benefit cap
Rachel Reeves has said she was angered by Nigel Farage’s suggestion that only British-born families should have the two-child benefit cap lifted, saying the Reform UK leader would keep children in poverty based on their skin colour.The chancellor, who will introduce legislation to lift the cap on Thursday, said it had been a burden for her not to be able to do so sooner, but it had been vital to do it at a moment of market stability.Farage told a press conference on Wednesday that his party would vote against the scrapping of the two-child limit, having previously suggested he could back the change. He said he was concerned it would “benefit huge numbers of foreign-born people”.Reeves said those comments were akin to saying some families deserved to have children in poverty
Marinera oil tanker changed flags ‘five times in five years’, says defence secretary – as it happened
The defence secretary, John Healey, told the Commons that the UK, at the request of the US, supported efforts to intercept an Russian-flagged tanker in the North Atlantic. Healey said: “The vessel refused to comply with the US’s exercise of its sanctions jurisdiction on 20 December, after which the US Coast Guard vessel Monroe pursued the ship across the Atlantic. This is a sanctioned, stateless vessel which carries a long history of nefarious activity and shares close links with both Iran and Russia.” Healey said there was a deployment of Royal Navy and RAF assets including airborne surveillance and RFA Tideforce and no UK personnel took part in the operation.Healey said he is visiting Kyiv “soon” to continue discussions on supporting Ukraine’s long term armaments and policing of any ceasefire
It’s unwise for Labour to attack the Green party and its wealth tax proposal | Letters
The Fabian Society’s Joe Dromey could not be more wrong in arguing that the Labour leadership should attack the Greens and Reform UK as representing “twin populisms” (Zack Polanski offering voters fantasy solutions, says head of Fabian Society, 31 December). Dromey dismisses the Green party’s support for a wealth tax as a “fantasy” policy. Yet this is a policy that eight in 10 Labour voters support. I have been campaigning for wealth taxes for years, and large numbers of Labour MPs now back such a measure.Dromey argues that a wealth tax could not fund all the investment we need in our communities
Ashes review launched by ECB as Stokes gives full backing to under-fire McCullum
Kicking zones and a ban on losing teams: NFL playoff tweaks we’d like to see
The Timberwolves should not play until ICE violence in Minneapolis is held to account | Lee Escobedo
Australia beat England by five wickets on day five of the fifth Ashes Test – as it happened
Talismanic Mitchell Starc adds final flourish to his imperious Ashes series | Geoff Lemon
Australia hold on to win fifth Ashes Test and leave England rueing missed chances