“But we have the tools necessary; in the short term the Bank of England will use the monetary tools at their disposal”. The pound fell on the Markit report, from euros 120.3 to 119.3.
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He expected that Britain’s economy will record a contraction of 0.4 percent in the third quarter, if economic performance continues in such a way.
The survey – regarded as a key early indicator of economic activity before official statistics are published – comes after Britons voted to leave the European Union in a crunch referendum on June 23.
Several nations called on Britain during weekend talks on the world economy to explain how the politically fraught Brexit process will unfold in order to avoid adding a new drag on the long and slow recovery from the financial crisis.
Britain’s economy was battered by the Brexit vote last month and faced a “dramatic deterioration” in activity as orders dried up and business investments were canned, key data showed Friday. “The data that we see over the next three months or so will be crucially important in shaping our response”, he told Sky News during a visit to China.
Russian Deputy Finance Minister Sergei Storchak said on Wednesday that G20 finance ministers and central bankers are likely to focus on the possible impact of Brexit on global economic growth when they meet in southwest China’s Chengdu on July 24-25.
The figures come after the International Monetary Fund slashed its growth forecasts for the United Kingdom, saying the Brexit vote had thrown a “spanner in the works” of the global economy.
This week the Daily Express had a headline: “Britain BOOMS after European Union vote: Ignore the doom-mongers…it’s good news all round”.
A major concern among businesses is the access Britain will have to the EU’s single market after leaving.
A departure from the European Union could mean companies based in Britain are cut off from the bloc’s single market, which guarantees no tariffs on trade and the free movement of workers and money.
Following the report, sterling fell by a cent against the dollar to the day’s low and British government bond prices rose.
Mr Lou said Brexit would “cast a shadow over the global economy” and that the “repercussions and fallout” would emerge over the next five to 10 years.
“As today’s survey of business activity shows, our country can’t wait for months on end whilst the Chancellor dithers about what to do instead”.
“Over the medium term we will have the opportunity with our Autumn (budget) statement to reset fiscal policy if we deem it necessary”, Hammond said.
He said: “At present the failed austerity policies of (former chancellor) George Osborne are still going ahead and the Government are still sticking to the failed fiscal framework”.
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Manufacturing dropped to its lowest level since February 2013, according to Markit, which compiles the data in its purchasing managers’ index (PMI). The composite index, which combines services and manufacturing, slumped to 47.7 from 52.4, the weakest reading since April 2009.
