British economy slowed by Brexit fears

Britain’s economy appears to have slowed since the start of this year as worries about the global economy, government spending cuts, and a vote on staying in the EU take their toll, a closely watched survey showed yesterday.

Financial data company Markit said its Purchasing Managers Index (PMI) for services recovered only slightly last month after reaching its lowest in nearly three years in February. 

Official data last week showed Britain’s economy did slightly better than thought at the end of 2015, but the Markit figures, which economists use as a guide to future official numbers, suggest 2016 got off to a weak start.

Markit said its services PMI pointed to a fall in quarterly economic growth in the first quarter to 0.4%, from 0.6% in the final three months of 2015. Britain’s economy grew 2.3% last year and is expected to grow by 2% this year.

“Business confidence remains in the doldrums as concerns about the global economy continue to be exacerbated by… issues such as Brexit and the prospect of further government spending cuts announced in the Budget,” said Markit’s chief economist, Chris Williamson.

If Britain votes to leave the EU, the country’s shipping sector faces years of disruption, a representative body has warned. Shipping contributes some £10bn (€12.4bn) annually to the UK economy.

“No one has left the EU before, and the EU may seek to ‘punish’ the UK for leaving, in order to discourage others from leaving too,” said Guy Platten, chief executive of the UK Chamber of Shipping trade association.

* Reuters

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