An earlier estimate had put the PMI at 49.1 and this is only the second time since early-2013 that figure has been below 50.0. Any reading below 50 indicates that activity is contracting.
Advertisement
Torrential rain was seen across more than half of China’s territory this summer, resulting in floods, landslides and causing heavy economic losses and fatalities.
An immediate effect of the June 23 vote has been a depreciation of the pound’s exchange rate, which raises prices of goods made in the eurozone more for British buyers and is therefore likely to lead to a fall in demand. It slipped below the threshold of 50 that separates contraction from growth for the first time since May.
Wednesday’s numbers – which broadly match an early version two weeks ago – pointed to Britain’s economy shrinking by 0.4 percent in the three months to September, a decline not seen since early 2009 when the BoE last cut interest rates, he added.
“The problem is that growth is looking increasingly lop-sided, which will worry policymakers and add to calls for further stimulus from the European Central Bank”, said Chris Williamson, chief economist at Markit.
United Kingdom manufacturing shrank more than initially forecast in July, suffering its biggest drop in more than three years.
“The marked service sector downturn follows news from sister PMI surveys showing construction activity suffering its steepest decline since mid-2009 and manufacturing output contracting at the fastest rate since late-2012”, Markit Chief Economist Chris Williamson said.
David Noble, group chief executive officer at the Chartered Institute of Procurement and Supply (CIPS), said: “After seven months of modest drops, employment figures showed an entrenchment in uncertainty with a sudden deterioration – the second sharpest drop in nearly three-and-a-half years, as businesses chose redundancy and restructuring to secure themselves against more possible bad news ahead”.
Three months of gains in industrial production helped offset the continuing distress among consumers in the second quarter, when gross domestic product lost 0.6 percent from a year earlier, the smallest drop since the contraction began at the start of 2015.
Although the official index dropped slightly, the bureau said the overall situation is stable.
Advertisement
Markit also provided breakout readings for the eurozone’s four largest economies, which also showed a surprising lack of impact from the Brexit vote.
