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The worse than expected UK PMI data has woken up sterling traders (who otherwise appeared to be taking a bit of a break as they await the general election result next month).
The pound is now down by 0.35% against the US dollar for the day, at $1.2868.
The PMI data represents the worst run since the global financial crisis triggered a recession a decade ago, IHS Markit said – leaving big questions for the Bank of England.
The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, according to Chris Williamson, chief business economist at IHS Markit. He 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.
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.