The UK construction sector suffered a record drop in activity during April as the coronavirus pandemic shut sites, data showed today.
The latest data showing the UK's biggest sector winners and losers from the Covid-19 outbreak comes as the Bank of England holds a regular meeting today and morrow at which it is expected to keep its main interest rate at a record-low 0.1%.
The Bank of England's policy announcements and new UK growth forecasts will be announced tomorrow, ahead of Prime Minister Boris Johnson telling the country on Sunday how he plans to ease its lockdown measures.
It comes amid reports that finance minister Rishi Sunak is looking into tapering the government's furlough scheme that is paying UK workers stuck at home.
Latest government figures showed 6.3 million people are being paid up to 80% of their salaries, costing the taxpayer £8 billion (€9 billion).
The closely-watched IHS Markit/CIPS UK construction purchasing managers' index showed a reading of only 8.2 in April, down from 39.3 in March and the lowest since records began in 1997.
A score below 50 indicates a contraction in output.
"Today we found out that social distancing has also brought construction activity to a complete halt," noted Capital Economics analyst Thomas Pugh.
"That indicates that the construction sector has been hit even harder than the services sector," he added.
In an attempt to get retail banks lending during the pandemic, the Bank of England recently slashed its key interest rate to 0.1% and pumped £200 billion of fresh cash into the economy in emergency measures.
"The Bank of England looks unlikely to deliver any further stimulus on Thursday," said Howard Archer, chief economic advisor to the EY ITEM Club.
"However, it is highly likely that the Monetary Policy Committee will make clear that it is ready and willing to take further stimulative action should economic circumstances or financial market conditions warrant," he added,
The Bank of England is expected also to slash its forecasts for UK economic growth this year and next, according to analysts.
Analysts warned that even worse economic data was set to land in coming weeks.
"The British economy has been hit very hard by the pandemic, and as bad as the economic reports are, we will probably see even worse ones in the next month or so," CMC Markets analyst David Madden said.
"There is a sense the worst of the lockdown is over, and that we could see a loosening of restrictions in weeks, and that should pave the way for more companies and sectors to reopen for business," he said.
"I suspect Mr Sunak is looking to phase out the furlough scheme as he foresees some people going back to work in the near-term," he added.