London-The British economy has been witnessing a large decline in the activities of the private sector since the Brexit vote last month. The deteriorating situation is the worst since the financial crisis that rocked the world.
According to a monthly survey, Britain’s business activity fell in July to its lowest level since April 2009, providing first evidence to the assumption of Brexit’s damaging effect on the country’s economy.
“The downturn, whether manifesting itself in order book cancellations, a lack of new orders or the postponement or halting of projects, was most commonly attributed in one way or another to Brexit,” said Chris Williamson, chief economist at Markit.
The preliminary composite purchasing managers’ index (PMI), a study of manufacturing and service industries conducted by the Markit group, tracked a record drop from 52.4 points in June to 47.7 points in July. A value under 50 indicates that private economic activity was contracting.
IMF chief economist Maurice Obstfeld said on Tuesday that “the direct effects specifically due to Brexit are greatest in Europe, especially the United Kingdom.”
Britain’s new Prime Minister Theresa May has said that she didn’t want the exit to take place before the end of the year.
Yet her government has not yet stated the nature of ties that it wants with the 28-member European Union after Britain’s exit.
In his turn, at the start of a trip to China to strengthen post-Brexit business ties, Finance Minister Philip Hammond said he would review economic data over the coming months.
“Over the medium term we will have the opportunity with our Autumn Statement, our regular late year fiscal event, to reset fiscal policy if we deem it necessary to do so in the light of the data that will emerge over the coming months.” BBC quoted him as saying on Friday.