Brexit shock pushes UK services and manufacturing into contraction says new survey

The Brexit shock has given the economy "a good kicking" according to a special set of surveys of businesses taken in the wake of the European Union referendum vote, which suggest the UK economy is now contracting at its steepest pace since the last recession in early 2009.

The “dramatic deterioration” will significantly increase the odds of a major monetary stimulus from the Bank of England next month to support the economy.

Markit/CIPS surveys of firms' purchasing managers conducted in recent days suggests activity in both the UK’s services and manufacturing sectors have slipped into contraction in the wake of the 23 June vote.

Howard Archer of IHS Global Insight described it as "a truly horrible survey" which suggests the Brexit vote is giving the economy "a good kicking".

Britain's economy shrinking at fastest rate since 2009, says survey

The UK economy shrank at its fastest rate since the peak of the financial crisis seven years ago, after the vote to leave the European Union, according to a survey of business activity.


In the first survey of business confidence since the referendum on 23 June, the services sector was particularly hard hit, showing its biggest drop on record.

With manufacturing dropping to its lowest level since February 2013, the survey suggests UK GDP could shrink by 0.4% in the third quarter, according to Markit, which compiles the data in its purchasing managers’ index (PMI).