British manufacturers slammed on the brakes last month following the country's June vote to leave the European Union and growth eased in the euro zone, surveys showed, likely adding to calls for more policy easing. Hayley Platt reports.
It's hardly a surprise. But still disappointing. Manufacturing in the UK shrank at its fastest pace in more than three years in July. (48.2 July) (52.4 June) (Source:Markit/CIPS) A sign that Britain's decision to leave the EU is hurting growth. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "New orders are lower, confidence is lower, and if we start to see that move into fears of unemployment for example, certainly wage negotiations over the course of the next 6-12-18 months then that's going to make sure that we are going to see further negativity within the manufacturing sector." Business morale plunged too. A survey of 1,000 chartered accountants showed business confidence fell sharply in July - after the Brexit vote (-27.7 June 24 - July 20) Compared to the period directly before the referendum. (-0.7 April 27 - June 23) Construction, property and transport were hit the hardest. It follow a similar sentiment from a consumer survey last week. possibly providing the impetus for the Bank the England to further cut interest rates later this week. SOUNDBITE (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "I think they'll do 25 basis points this Thursday. I think that's mainly more of a signal to markets that they are there, it's more a case of what happens after that.." There's talk of additional quantitative easing too. And possibly an increase in the amount of credit lending to UK businesses. Growth will almost certainly be revised down. The main question is whether the UK is heading into recession - most analysts say yes. But Carney prefers the term 'material slowdown'.