General

UK economy flat-lines as Brexit nears

Britain’s economy risks stalling as Brexit nears and the global economy slows, with firms in the dominant services sector reporting job cuts for the first time in six years and falling orders.

This is according to a survey which showed that the Purchasing Managers’ Index, fell to 50.1 in January 2019 from 51.2 in December � its lowest level since July 2016 and barely above the 50 mark that separates growth from contraction.

A Reuters poll of economists had expected a reading of 51.0.

Britain’s economy defied forecasts from some economists that it would go into recession after the 2016 referendum vote to leave the European Union.

However, growth slowed sharply in late 2018 as worries mounted about an abrupt, no-deal Brexit.

Overall, the survey suggested Britain’s economy is flat-lining after losing momentum late last year.

Tuesday’s figures are likely to worry Bank of England officials ahead of their latest interest rate decision announcement and new forecasts for the economy on Thursday.

The latest PMI survey results indicate that the UK economy is at risk of stalling or worse as escalating Brexit uncertainty coincides with a wider slowdown in the global economy, said Chris Williamson, chief business economist at survey compiler IHS Markit.

The report adds to other signs that Brexit, scheduled in less than two months’ time, is taking its toll on businesses and consumers.

Source: Voice of Nigeria