The top tier was 48.6 points lower at 6,645.4, with the latest Markit/CIPS UK purchasing managers’ index (PMI) showing the ongoing fallout from the Brexit vote, with construction output shrinking at its fastest pace since June 2009. All eyes will now be on the all important interest rate decision from the Bank of England, which will be announced tomorrow, the bank’s Monetary Policy Committee begins its two day policy meeting today, after surprisingly voting 8-1 in favour of retaining interest rates at 0.5% three weeks ago.
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According to the financial services firm IHS Markit, which compiles the monthly report, India’s manufacturing economy revived at the beginning of the second half of 2016 after the slowdown seen in the April-June quarter, as growth of both production and new orders continued to strengthen in July.
It also found that the rate of job losses across the sector was its second-sharpest for nearly three-and-a-half years.
Though the overall increase in output was led by consumer goods producers, growth was also recorded in the intermediate goods category.
More evidence of post-Brexit economic malaise in the United Kingdom emerged on Wednesday with confirmation that a closely watched gauge of the services sector had declined at the fastest pace in more than seven years. With lean inventories and solid orders, there is scope for further near-term expansion, although there will be some disappointment over export trends.
“The weak numbers provide powerful arguments for swift policy action”, said Rob Dobson, an economist at Markit.
However, it said the boost to exports was “less marked than previously estimated” due to sluggish overseas demand.
Markit said incoming new business volumes fell for the first time since the end of 2012.
He said: “There was little consolation from the detail of July’s survey”.
“Employment in manufacturing declined for the seventh month in succession and input-price inflation rose to a five-year high off the back of sterling’s weakness and higher commodity prices. There were also some reports that demand patterns had been more resilient than expected given the uncertain business outlook”.
“Without new orders coming through, this downward trajectory is likely to get worse, at least in the short term”.
The 19-nation eurozone economy grew 0.3 percent in the three months to June, down sharply from 0.6 percent in the first quarter.
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However, in contrast to the PMI survey, the Mineral Products Association, which represents companies that make products such as asphalt and cement, said its figures pointed to an uptick in activity in the construction industry.
