Activity among UK manufacturers contracted at its fastest pace for three years in July, according to a closely watched survey.
The Markit/CIPS manufacturing purchasing managers’ index, the first to have full data since the UK’s vote to leave the EU, showed a fall to 48.2, the lowest since February 2013.
Its reading for June had been the strongest since January, at 52.4. A reading above 50 indicates expansion, but below 50 indicates contraction. The decline was sharper than an initial reading of 49.1 indicated late last month.
The Markit/CIPS manufacturing index is based on a survey of 600 industrial companies and reflects data on orders, output, employment, suppliers’ delivery times and companies’ inventories. Rob Dobson, senior economist at Markit, said the survey came “amid increasingly widespread reports that business activity has been adversely affected by the EU referendum”. He added: “The downturn was felt across industry, with output scaled back across firms of all sizes and across the consumer, intermediate and investment goods sectors, although exporters did report a boost from the weaker pound.”
The latest economic data comes as the Bank of England’s Monetary Policy Committee (MPC) prepares to issue its latest interest rate-setting decision on Thursday.
The MPC had been widely expected to cut interest rates last month, but unexpectedly left them unchanged.
This time, rates are likely to fall from 0.5% to a new low of 0.25%, analysts predict. – BBC
