skip to main content

UK economy near stagnation due to Brexit, weak global demand - PMI

A modest expansion among services firms barely offset weakness in manufacturing and construction
A modest expansion among services firms barely offset weakness in manufacturing and construction

British economic growth almost ground to a halt last month, according to the latest IHS Markit/CIPS services Purchasing Managers' Index.

A modest expansion among services firms barely offset weakness in manufacturing and construction caused by the Brexit crisis and weaker global growth, the survey indicated.

The PMI Index edged up to 51 from 50.4 in April, its strongest reading in three months and slightly above economists' average forecast in a Reuters poll.

Equivalent surveys for manufacturing and construction published earlier this week unexpectedly fell deep into contractionary territory, and taken together the three PMIs gave one of their weakest readings since 2012.

A euro zone PMI was only slightly stronger, as businesses across Europe face challenges from the trade conflict between the United States and China as well as Brexit.

Official data showed Britain's economy grew a robust 0.5% in the first quarter of the year, though much of that was driven by firms stockpiling ahead of a Brexit deadline of March 29, which has since been postponed until October 31st.

The Bank of England forecasts Britain's quarterly economic growth rate will slow to 0.2% for the three months to June.