UK economy shrinks on Brexit, mounting global worries

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LONDON
Britain’s economy appears to have shrunk for the first time since late 2012 between April and June as worries about Brexit were compounded by global trade tensions, a closely watched survey showed on Wednesday. A day after Bank of England Governor Mark Carney warned of the growing risks from a no-deal Brexit and protectionist trade policies, a gauge of Britain’s huge services industry the IHS Markit/CIPS services Purchasing Managers’ Index (PMI) slipped to 50.2 in June, just above the no-growth level of 50.
Economists polled by Reuters had expected the PMI to remain at May’s level of 51.0.
Equivalent surveys for manufacturing and construction published earlier this week showed those sectors contracted in June, meaning Britain’s economy overall probably shrank by 0.1 per cent in the second quarter, IHS Markit/CIPS said. British gross domestic product last shrank from one quarter to another in the final three months of 2012, according to official data. The last time GDP shrank for two or more quarters in a row the widely accepted definition of a recession was in 2008-2009, during the global financial crisis.

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