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The figure is now 2.9 percent below January's recent peak and marks the second monthly decline in total real construction output. "What's more, the weakness in the official series has come despite the trade data finally reporting some strong growth in export volumes".

Meanwhile the construction industry also endured a hard month, failing to reverse April's 1.1 per cent decline by dropping 1.2 per cent in May against forecasts of 0.5 per cent growth.

On a yearly basis, industrial production dropped unexpectedly by 0.2%, but slower than the 0.8% decrease seen in April. Sterling weakened by about 0.5 per cent against both the euro and the U.S. dollar.

United Kingdom industrial production, construction output and trade all dropped more than expected in May, according to data by the Office for National Statistics (ONS).

The latest composite PMI survey also showed that business activity rose at its weakest pace in four months in June, with business optimism falling amid rising uncertainty around the future of the country after Brexit.

On the other hand, construction output declined 1.3%, reversing April's 3.5% increase.

FXTM research analyst Lukman Otunuga said: "With the string of economic data from the United Kingdom this week proving nothing to celebrate about, investors may be forced to re-evaluate the possibility of a United Kingdom rate hike this year".

'And though an improved performance from the services sector will provide some support, GDP is likely to have grown by just 0.3 per cent with the risks to that projection skewed to the downside'.

Economists said the figures suggest any rebound in growth from the first quarter will be muted and could delay an interest rate hike by the Bank of England, which is increasingly anxious about import price increases stoked by the pound's sharp fall in value since last year's Brexit vote.

Meanwhile, manufacturing output grew 0.4% after staying flat a month ago.

Separate data from the ONS showed that the UK's trade deficit widened in May. A decrease in services exports also contributed to the fall.


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