U.K. Manufacturing Orders Fall at Fastest Pace Since 2009 Crisis
It comes amid heightened fears that Britain is facing a potentially damaging no-deal Brexit.
(Bloomberg) -- U.K. manufacturers are more pessimistic than at any time in the past three years after order books shrank at a pace last exceeded during the financial crisis a decade ago, according to the Confederation of British Industry.
The gloomy assessment adds to evidence that the economy suffered a Brexit hangover in the last quarter after orders were brought forward to the start of the year ahead of the original March 29 deadline to the leave the European Union.
It comes amid heightened fears that Britain is facing a potentially damaging no-deal Brexit. The winner of the Conservative contest to succeed Prime Minister Theresa May will be announced on Tuesday, and the clear favorite Boris Johnson has vowed to take Britain out of the EU on Oct. 31, with or without a deal.
CBI indexes of domestic and export orders hit their lowest levels since 2009 in the three months to July and optimism slumped to the weakest since the aftermath of the 2016 Brexit referendum. A gauge of output also plummeted, though the decline partly reflects car-factory shutdowns around the original Brexit date and a modest recovery is expected in the next three months.
Investment intentions weakened, employment fell and inflationary pressures eased, according to the survey, which questioned almost 300 firms between June 25 and July 15.
A monthly index of orders fell to the lowest in more than nine years in July, suggesting the economy got off to a poor start in the third quarter. Export prospects are being hit by trade tensions and slowing global growth.
Gross domestic product probably shrank for the first time in seven years in the second quarter, and the National Institute of Economic and Social Research warned on Monday that the economy may already be in a technical recession.
To contact the reporter on this story: Olivia Konotey-Ahulu in London at okonoteyahul@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Andrew Atkinson, Jill Ward
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