British economy fades quickly after the “Brexit” – AméricaEconomía.com

The British economy is shrinking, as showed Friday the first survey on business activity from the historic decision of voters in UK to leave the European Union, which led the government to suggest that it could use fiscal stimuli if conditions worsen.

the Bank of England has also made clear that may need a program of monetary easing.

the preliminary reading of the index of Purchasing Managers (PMI) Markit – based on surveys of senior executives who make spending decisions in the main 1,250 UK companies – suffered the biggest decline in its 20-year history

the decline is consistent with an economy. shrink 0.4% in the third quarter, contrasting with the expansion of 0.4% in the first quarter.

“in July there was a dramatic deterioration of the economy,” said Chris Williamson , chief economist at Markit. “The decline, already be manifesting itself by order cancellations or lack of new orders or the postponement or suspension of projects was attributed mostly one way or another to the ‘Brexit’” he said.

the survey revealed more than a week after Theresa May form a new conservative government, it reflects the challenge facing the prime minister to maintain market confidence and investor as he embarks on the arduous negotiations to finalize the “Brexit” .

the British finance minister, Philip Hammond, dismissed the negative reading of the PMI to consider a measure of confidence and no “hard data” but also said the government could take steps to support economy when it announces its budget plans later in the year.

“the characteristics of our framework will depend on the state of the economy when the statement (budget) autumn (northern hemisphere). The data we see in the next three months will be crucial to define our response relevance, “he said Hammond told Sky News from China, to where he traveled to attend a meeting of G-20.

Hammond participates in this weekend at the meeting of finance ministers of the 20 largest economies in the world, and its partners will be eager to hear him talk about how Britain will seek to ensure an expeditious exit from the EU, minimizing damage to the world economy .

the International Monetary Fund (IMF) cut Tuesday its forecast for growth of the global economy after the “Brexit” put “a stick on the wheel.” the agency lowered its estimates of expansion in the UK in 2017 by 0.9 percentage points, leaving it at 1.3 percent.