Brexit Hit U.K. Factories Harder Than Initially Estimated

U.K. manufacturing shrank more than initially forecast in July, suffering its biggest drop in more than three years.

A Purchasing Managers’ Index slumped to 48.2, below the one-off flash reading of 49.1, Markit Economics said Monday in London. The index has only fallen below the 50 mark — which separates expansion from contraction — one other time since early 2013. The index was at 52.4 in June.

The report suggests that Britain’s decision to leave the European Union may have a harsher impact on the economy than initially expected. Markit’s flash estimates published last month had already signaled that business activity was shrinking at its fastest pace since the last recession seven years ago. That prompted Bank of England official Martin Weale to change tack and back his colleagues’ call for stimulus this week.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam

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