UK Economy Feels Strain of Global Slowdown

Date: 01 July 2019 - 21:11

News ID: ۶۷۶۰۱

LONDON (Reuters) - Britain’s economy has lost momentum and might have shrunk in the second quarter of 2019, according to data that showed the double impact of Brexit and the slowdown in the global economy.
Manufacturers had their worst month in more than six years and consumers increased their borrowing at the slowest pace since 2014.
The value of sterling fell against the dollar and the euro after the data was published.
Howard Archer, an economist with EY Item Club, a forecasting group, estimated that Britain’s economy contracted by 0.2% in the April-June period.
The Bank of England last month cut its forecast for economic growth in the second quarter to zero.
That largely reflected an unwinding of the rush by many factories to get ready for the original Brexit deadline which has now been delayed until Oct. 31.
But economists said Monday’s manufacturing purchasing managers’ index showed how hard Britain’s factories were also being hit by the slowdown in the world economy caused by the trade skirmishes between the United States and China.
The overall PMI slumped to 48.0 in June from May’s 49.4, well below the average forecast in a Reuters poll of economists and its lowest reading since February 2013.
Export demand fell for a third month as manufacturers around the world lost confidence.
Allan Monks, an economist at JP Morgan, said the weak PMI survey challenged his view that manufacturing growth would rebound at the start of the third quarter.
The pound slid on Monday after British manufacturers suffered the sharpest fall in activity in more than six years last month.
Brexit uncertainty and global trade tensions appear to be damaging industry, while firms have also stopped stockpiling for a no-deal Brexit that never came in March.
The IHS Markit/CIPS manufacturing purchasing managers' index (PMI), a monthly survey on the performance of 600 UK firms, slid from a 49.4 reading in May to 48 in June.