LONDON, Oct 4 Reuters Britain39;s construction sector grew at its fastest pace in nearly twoandahalf years in September, helped by a sharp jump in civil engineering and an upturn in housebuilding, but costs faced by firms escalated, an industry survey showed on Friday.

There was also concern among some companies about possible spending cuts and tax increases in finance minister Rachel Reeves first budget later this month.

The SP GlobalCIPS UK Construction Purchasing Managers39; Index jumped to 57.2 in September its highest since April 2022 from 53.6 in August and well above economists39; average expectation of 53.3 in a Reuters poll.

Firms said lower borrowing costs and political stability after July39;s landslide election win by Prime Minister Keir Starmer39;s Labour Party were fuelling the growth acceleration.

A combination of lower interest rates, domestic economic stability and strong pipelines of infrastructure work helped to boost order books in recent months, Tim Moore, economics director at SP Global Market Intelligence, said.

Survey respondents cited rising sales enquires since the general election, as well as lower borrowing costs and the potential for stronger housebuilding demand as factors supporting business activity expectations in September.

The Bank of England is expected to cut interest rates again at its next meeting in November after holding borrowing costs at 5 in September. It made its first reduction in four years in August.

Governor…