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UK: anxious times for pre-Brexit economy

Video Credit: Reuters Studio - Duration: 01:48s - Published
UK: anxious times for pre-Brexit economy

UK: anxious times for pre-Brexit economy

Britain's services sector stagnated last month and car sales were down again: a host of new data surveys point to a still highly uncertain outlook for a UK economy caught in Brexit turmoil.

David Pollard reports.

Mixed at best, recession at worst ... The judgements on the UK's latest crop of data readings are hardly upbeat.

UK services stagnated in October - a PMI reading of 50 is exactly on the line between contraction and expansion in the sector.

Similar surveys of manufacturing and construction already show they remained in decline.

Consumers, meanwhile - a key driver for the UK economy - appear to be keeping a tight rein on spending ahead of Christmas .... And ahead of a pre-Christmas election.

As the ruling Conservative and opposition Labour and other parties started campaigning in earnest, the British Retail Consortium said its 12-month rolling average of sales growth fell to a new low of 0.1 per cent.

Separate figures suggest new car registrations fell nearly 7 per cent - in the eighth month of downturn.

As for sterling - long-battered by Brexit uncertainty - it actually drifted higher after Tuesday's (November 5) numbers.

But will remain a key telltale of investor confidence before - and after - the December 12th polling date, says Richard Hunter of Interactive Investor.

(SOUNDBITE) (English) RICHARD HUNTER, HEAD OF MARKETS, INTERACTIVE INVESTOR, SAYING: "In terms of continuing to tread a fairly narrow range, you could envisage that a hung parliament would keep that going.

I think the only positive we're going to get shorter-term for sterling would be a Conservative win.

And all bets would then be off in terms of a Labour win; there's be general pressure on asset classes and sterling in particular." The new numbers put the Bank of England in the frame.

After Thursday's (November 7) policy decision, it's to present its latest growth and inflation forecasts.

Expect no policy action from the central bank, say most analysts, until Britain's political upheaval subsides.




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