The disappointing tone of this week’s survey evidence and hard economic data has raised concern that the economy is now succumbing to Brexit fears. However, there were probably some non-Brexit related factors at play. And growth should still see some acceleration ahead.
Coming on top of falls in the manufacturing, construction and service sector Markit/CIPS PMIs earlier in the week, the disappointing tone of the latest official data on industrial production and construction made a significant rebound in GDP growth in Q2 more difficult to achieve. Admittedly, the all-sector PMI still points to quarterly growth of around 0.5%. But on the basis of the hard data, even growth of 0.4% would require a monthly rebound in growth in June.
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