More doom and gloom sadly as more business data has emerged post-Brexit.
It has been reported that the UK’s manufacturing sector is at its lowest level for over three years. It is more worrying news that the UK economy is grinding to a halt as the fall-out from the EU referendum begins to take its toll.
An index, by Markit, of the manufacturing industry, a month by month study, indicated a fall to 48.2 in July down from 52.5 in June, when it was assumed the electorate would choose to remain part of the European project, obviously that turned out to be false and the UK economy is still coming to terms with the consequences of this choice.
According to the index if the number on the data falls below 50, then that reveals that the sector is contracting, which could contribute towards a another recession, just after the UK has recovered from the previous slump, the worst in a generation.
The PMI score was estimated to be 49.1 so it is a lot less than that, which will worry any in the business community and beyond. Brexit is thought to be a major factor for the dip, but manufacturing output has indeed been falling generally in the UK over a long period.
Rob Dobson, senior economist at Markit, said: ‘The pace of contraction was the fastest since early-2013 amid increasingly widespread reports that business activity has been adversely affected by the EU referendum.
‘The drops in output, new orders and employment were all steeper than flash estimates.
‘The weakening order book trend and upswing in cost inflation point to further near-term pain for manufacturers.
‘On that score, the weak numbers provide powerful arguments for swift policy action to avert the downturn becoming more embedded and help to hopefully play a part in restoring confidence and driving a swift recovery.’
Costs in the manufacturing sector surged to a five-year high last month, ‘reflecting a sterling-induced rise in import costs and higher metal and commodity prices.’
It is hoped the UK economy will rally at some point and manage to avoid a recession, but the daily business updates, appear to indicate the opposite. It has meant fresh demands for the Bank of England to further cut interest rates, which already stand at a historically low 0.5 per cent.