Britain’s construction sector contracted at the fastest pace in more than a decade during November, as the rate of new houses being built continue to plunge.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit construction index revealed that activity had slowed from a reading of 35.1 in October to 31.8 in November – the lowest point since the series began in 1997.

A reading below 50 indicates that a sector is contracting.

Today’s data revealed that activity had slowed across all areas in construction, hitting new orders, output, employment, and buying activity with housing emerging as the worst hit.

Yesterday, Bank of England figures revealed that new mortgage approvals in October set record lows, with just 32,000 home loans worth only £3.9 billion agreed.

Overall lending to individuals also rose in the month at a meagre annual rate of just 5.3 per cent, the weakest since October 1993.

Also, CIPS/Markit survey of manufacturing revealed that industrial activity fell to its lowest since January 1992 and pointed to industry's output and orders falling at the fastest pace since then, in turn triggering sweeping jobs cuts.

The Bank of England’s Monetary Policy Committee will meet on Wednesday and Thursday this week to decide whether to cut the interest rate after last month’s steep 1.5 per cent reduction to 3 per cent.

Howard Archer, chief UK and European economist at HIS Global Research said: “The deepening construction downturn reinforces belief that the overall economy will suffer sharper contraction in the fourth quarter and reinforces already intense pressure on the Bank of England to cut interest rates aggressively further on Thursday.

“We believe the Bank of England looks ever more likely to cut interest rates by 100 basis points from 3 per cent to 2 per cent.

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