UK economy may be lurching into recession

  • by Ofeed Team
  • September 4, 2019, 16:23 AM
  • 34 Views
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The United Kingdom may be on its way to its first recession since the financial crisis, after Brexit uncertainty caused the country's dominant service industry to fall more than expected.  

According to IHS Markit, the British economy will record a contraction of 0.1 percent in the three months through September, following a 0.2 percent drop in the first quarter. That would mean the country has entered a technical recession even before it leaves the EU by the end of October. 

What could be worse for the British economy is that Boris Johnson's government may seek to leave the EU without a deal.

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Economic data released Wednesday by the Bureau of Statistics Markit revealed that UK services PMI in Britain recorded a slowdown to the point of 50.6 during August, and broke market expectations of a slowdown to just 51.0, compared to an earlier reading of 51.4 points in July. 

In the same context, UK manufacturing PMI fell to 47.4 in August from 48.0 the previous month and below market expectations at 48.4.as the steepest month of contraction in the manufacturing sector since July 2012.  

UK Construction PMI fell to 45.0 in August from 45.3 the previous month and market expectations are lower at 45.9. The reading indicated the fourth consecutive month of contraction in the construction sector.

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