James Smith, developed markets economist at ING, points out that the UK manufacturing PMI has slipped back further as Brexit preparations accelerate as the current index reading of 52.0 is only because firms are building up inventory ahead of Brexit.
Key Quotes
“We are sceptical that this stock-building activity will do much to boost overall economic growth.”
“While an extension to the Article 50 negotiating period is becoming more likely, we are unlikely to know for sure until much closer to the 29 March deadline.”
“The upshot is that first quarter growth is likely to be fairly weak, and we’ll be watching next week’s services PMI closely to see whether the sector – which is the major driver of economic activity in the UK – has entered contractionary territory.”
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