Mark Preskett: The UK’s vote to leave the European Union has raised fears of another recession across Britain. And we saw our first evidence of this with a grim set of PMI data released late last week.
The PMI’s are closely-followed business surveys and both the manufacturing and services numbers came in well below consensus. It was the clearest indication yet that business activity is slowing.
Whether this translates into negative GDP is open to debate. The bulls point to the fall in the value of sterling of around 15% over the past 12 months, making UK assets much more attractive to overseas investors.
Certainly, we’ve seen some big M&A deals since the Brexit vote. But the uncertainty around UK’s future trade relationships has led to some economists pencilling a negative GDP print for Q3.
Whatever the outcome, the Brexit vote and recent weak PMI has increased the likelihood of a rate rise this summer. Indeed the futures market is now pricing this in as a 97% certainty.