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WORLD NEWS Thursday 4 July 2019

UK recession fears mount amid Brexit and global slowdown

By PAN PYLAS where they will have con-
Associated Press tinued frictionless access
LONDON (AP) — Britain’s to the European single
economy showed alarm- market. Bank of England
ing signs of a sharp slow- Governor Mark Carney sig-
down, possibly even into naled in a speech on Tues-
recession, as uncertain- day that the British econo-
ty over Brexit combines my is slowing by more than
with a less benign global predicted. He said it looks
backdrop, according to a like “the negative spillovers
closely watched survey of to the U.K. from a weaker
business activity in the U.K. world economy are in-
released Wednesday. creasing and the drag from
The survey, from financial Brexit uncertainties on un-
information firm IHS Markit derlying growth here could
and the Chartered Institute be intensifying.”
of Procurement & Supply, That was before Wednes-
showed that the economy day’s report from IHS Markit
contracted in June at its and CIPS, which also listed
steepest rate since the im- a catalog of woes afflicting
mediate aftermath of the the British economy from
country’s vote three years the sharpest drop in fac-
ago to leave the European tory output since Oct. 2012
Union. In this May 2, 2019, file photo Mark Carney the Governor of the Bank of England speaks during an and the steepest decline
The survey also found the Inflation Report Press Conference at the Bank of England in the City of London. in construction since April
second-steepest fall in out- Associated Press 2009.q
put since the height of the trade tensions between
global financial crisis a de- the United States and Chi-
cade ago. na. However, it has to do
The survey’s main “all-sec- that at a time when no one
tor” purchasing manag- has an idea how Brexit will
ers’ index fell in June to pan out in the weeks and
49.2 from 50.7 the previous months ahead.
month, suggesting that a Brexit has been delayed
contraction is underway. to Oct. 31 after the British
Though some of the retreat Parliament’s failure to back
was clearly due to firms ad- the deal that Prime Min-
justing their stock levels af- ister Theresa May agreed
ter boosting them to record with the EU. Jeremy Hunt
levels ahead of the original and Boris Johnson, who
Brexit date of March 29, the are fighting it out to re-
survey does clearly high- place May as leader of the
light the scale of the pessi- Conservative Party and to
mism among firms. become the next prime
“The overall degree of busi- minister, have indicated
ness sentiment about the that they’d be prepared
year ahead remains wor- to back a “no-deal” Brexit
ryingly subdued, charac- on that date if no revised
terized by uncertainty over agreement with the EU is
the potential disruption of struck.
Brexit, signs of weakening Most economists think such
sales growth and a lower- an outcome will lead to a
ing of economic growth deep recession in Britain
projections,” said Chris as tariffs and other restric-
Williamson, chief business tions to trade are imposed.
economist for IHS Markit. With so much uncertainty
Like all economies around around, businesses remain
the world, Britain has had reluctant to invest in the
to confront the slowdown future and many are warn-
in the global economy ing they may up sticks and
largely due to mounting move to the continent