UK PMI Manufacturing dropped to 48.3 in November, down from 49.7, missed expectation of 48.8. PMI Services dropped to 48.6, down from 50.0, and missed expectation of 50.1. That’s also the lowest reading in 40 month. PMI Composite dropped to 48.5, down form 50.0, hitting a 40-month low.
Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:
“With an upcoming general election adding to Brexit-related uncertainty about the outlook, it’s no surprise to see UK businesses reporting falling output and orders in November. The decline signalled by the flash PMI follows stagnation in October and adds to what has been the survey’s worst spell since the recession of 2008-9.
“The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, and also pushes the PMI further into territory that would normally be associated with the Bank of England adding more stimulus to the economy.
“While Brexit issues such as stock-building and car factory closures have led to volatile GDP data so far this year, making monetary policymaking especially difficult and encouraging the Bank of England to sit on its hands until the fog clears, the PMI surveys are not only warning that the underlying trend in the economy is deteriorating markedly, but also that the labour market is cooling. A worsening jobs market has the potential to feed through to weaker consumer spending and slower wage growth, thereby undermining two of the key supports to the economy in recent months. The big question will be just how long can the Bank of England hold its nerve in keeping policy unchanged.”
