The United Kingdom’s decision to quit EU has resulted in a massive blow to the country’s economy. In fact, business activities dropped at a really fast speed in comparison to the fall recorded 7 years before. The drop clearly indicates that political influences are pushing the country towards recession. It also puts Bank of England under a lot of pressure to give fresh stimulus.
The government is also being forced to overturn fiscal rigidity. UK’s pound slumped post the release of the Markit’s report that indicated that the figures are likely to drop by around 0.4% in this particular quarter due to Brexit.
According to financial experts and economists, the drop in the composite PMI index was way higher than what they had expected. Currently, it is at its lowest in comparison to the figure recorded in the month of April in 2009. UK’s pound altered the gains recorded earlier to drop 0.8% and hover around 1.3133 dollars.
The experts also indicated that the Bank of England’s governor Mark Carney as well as other officials will now hold discussions to determine if the country needs additional stimulus or not. It must be noted that almost every member of the Monetary Policy Committee feels that some sort of action should be taken during their upcoming meeting.