Brexit has already hammered the UK economy
Everyone thought Brexit would spell doom for the UK economy. Those predictions are starting to come true, according to new data.
The UK economy endured its worst month since April 2009, when the country was in the throes of the global financial crisis. That's according to the Purchasing Managers' Index, which tracks the manufacturing and service sectors.
These core economic indicators dropped at the quickest rate in more than seven years, with both sectors contracting in July.
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The graph below indicates just how bad the immediate post-Brexit impact appears to be. The big trough is the global financial crisis.
There is a silver lining --the weakness of the pound in relation to other currencies made British goods suddenly much cheaper, leading to an increase in the company's exports of goods.
It's a very thin silver lining, however, since the weak pound also made it expensive to import materials needed to make those good.
"The downside of the exchange rate was a steep rise in manufacturers’ input prices, mainly due to higher import costs," wrote IHS Market in the data release.
An improvement in exports may not be able to save the UK from seeing an overall shrinking of the economy.
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British policymakers were waiting for more information on how Brexit would affect the economy before taking action on stimulus efforts, the report said.
"The slump ... will provide a powerful argument for swift action," said Chris Williamson, chief economist at Markit, which produced the report.
"The true extent of the impact of this uncertainty still remains to be seen next month," he added. "But with optimism in the UK’s service sector at a seven-and-a-half year low, policymakers must take swift action to stop further decline amid political upheaval."
Government intervention in the UK economy may just be a matter of time if economic conditions are seen to worsen.
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Emma Hinchliffe is a business reporter at Mashable. Before joining Mashable, she covered business and metro news at the Houston Chronicle.
