The decision to leave the European Union has caused a ‘dramatic deterioration’ in the UK’s economy, research from financial data firm IHS Markit has suggested.
New data from the firm’s Purchasing Managers’ Index (PMI) indicates a fall to 47.7 in July – the lowest level in seven years. A PMI reading below 50 indicates contraction.
The data was collected from a survey of over 650 services companies from a wide range of industries, including the transport, restaurant and computing sectors.
A decline in output and orders in the services and manufacturing sectors contributed to the low PMI reading.
Exports, however, picked up as the pound weakened.
Chris Williamson, chief economist at IHS Markit, said: ‘July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early 2009.’
He added that the economy could contract even further during the third quarter of this year if the current economic slump continues.