The British economy withering fast by Brexit – El Universal

LONDON The British economy is shrinking, as showed on 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 might use fiscal stimulus if conditions worsen. The Bank of England has also made clear he might need a monetary easing program.

The preliminary reading of the Purchasing Managers Index (PMI) -based Markit surveys top executives who make decisions spending on major thousand 250 companies UK- suffered the largest drop in its 20-year history.

the decline is consistent with an economy that 0.4% shrink in the third quarter, contrasting with expansion of 0.4% from January to March this year.

“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 realize the output of UK EU.

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 the economy when it announces its budget plans later in the year.

“the characteristics of our framework will depend on the state of the economy at the time of release [budget] autumn [boreal]. 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 a meeting of G-20.

Hammond participates for this purpose week 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) on Tuesday cut its growth forecasts for the global economy after the Brexit put “a stick on the wheel.” The agency lowered its estimates of growth in the UK for 2017 by 0.9 percentage points, leaving it at 1.3%.