British economy worsens after Brexit

The British economy is a huge deterioration, with the largest drop of private activity from the global financial crisis, after the decision of the country to leave the European Union, revealed on Friday one awaited study.

The financial services company Markit published on Friday its composite index of purchasing managers PMI for the month of July, falling to the lowest level since April 2009.

The composite index was established in July at 47.7 points, in step backwards from the 52.4 points the previous month. A PMI index greater than 50 points means that the activity evolves, while a smaller number represents a decrease.

"The month of July was marked by a spectacular deterioration of the economy, with the activity of companies, falling at the fastest pace since the peak of the global financial crisis in early 2009," said Chris Williamson, chief economist at Markit.

"The change of trend, manifested by cancellations of requests, absence of new orders and the postponement or cancellation of projects has been allocated in one way or another to Brexit" he said.

The PMI index for the services sector, very important to the British economy, was established specifically to 47.4 points in July compared to 52.3 points in June, at its lowest level in more than seven years.

The data, collected between 12 and 21 July, are still provisional and Markit will publish the final figures at the beginning of August.

These benchmarks were quite expected, since that contribute a first accurate picture of the state of the British economy after the referendum of 23 June, which awarded the victory to the British supporters to leave the EU.

To see the effects of Brexit in official statistics, still have to wait several weeks or even months.

- Recession in sight -

"The fall of PMI composite to its lowest level since 2009 gives the first evidence that the UK is entering a period of sharp slowdown," said Samuel Tombs, an economist at Pantheon Macroeconomics.

Economists wonder now if the country can escape the recession, which is characterized by two consecutive quarters of contraction in gross domestic product (GDP).

Growth forecasts were revised sharply downwards to the UK. The International Monetary Fund (IMF) has reduced the forecast of world growth by 0.9 point, to 1.3% for the year.

"The future effects of Brexit are exceptionally uncertain", estimated on Tuesday the chief economist of the IMF, Maurice Obstfeld.

The new British Prime Minister Theresa May stated that it would notify the desire to leave the EU in 2016, while his government determines the type of relationship you want to establish with its 27 European partners.

Meanwhile, families and British businesses are still cautious.

The only positive is the improvement of exports of industrial products, thanks to the pound fall against other currencies, which cheapens relatively British products abroad.

It also seems increasingly likely that the Bank of England rescue the British economy with new stimulus measures in August, after having chosen to maintain the "status quo" in June.

But the new British finance minister, Philip Hammond, said at the start of a trip to China, which may adopt new measures in the next northern hemisphere autumn.

"In the medium term we will have the occasion, with our autumn discourse (...) to redesign the budget policy if we consider necessary, based on the statistics that appear in the coming months," Hammond said, quoted by the BBC.