U.K. manufacturing shrank more than initially forecast in July, suffering its biggest drop in more than three years.
A Purchasing Managers’ Index slumped to 48.2, below the one-off flash reading of 49.1, Markit Economics said Monday in London. The index has only fallen below the 50 mark — which separates expansion from contraction — one other time since early 2013. The index was at 52.4 in June.
The report suggests that Britain’s decision to leave the European Union may have a harsher impact on the economy than initially expected. Markit’s flash estimates published last month had already signaled that business activity was shrinking at its fastest pace since the last recession seven years ago. That prompted Bank of England official Martin Weale to change tack and back his colleagues’ call for stimulus this week.
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