- Posted by Shyam Gokani in Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Prime Minister, Sterling, UK
- September 2, 2016
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Sterling and Britain’s blue chip stock index rose to a day’s high this morning after a survey showed the downturn in the construction sector was easing, boosting expectations that the economy is holding up well after the Brexit vote.
The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) rose to 49.2 from 45.9 in July, still below the 50 mark dividing growth and contraction but beating all forecasts in recent polls.
The construction PMI followed data on Thursday that showed the British manufacturing sector staging one of its sharpest rebounds on record. The Markit/CIPS manufacturing PMI jumped to a 10-month high of 53.3 in August, recovering from the three-year low it hit in July.
British businesses recovered some confidence about their prospects after a post-Brexit vote scare, but remained largely pessimistic about the economic outlook, a survey showed on Friday.
The proportion of businesses that were optimistic about their own prospects over the next 12 months rose to 48 percent in August, up from 46 percent in July, according to the monthly survey conducted by YouGov and the Centre for Economics and Business Research.
The overall confidence index reached 109.7 in August from 105.0 in July, regaining much of the ground it lost immediately after the UK voted to exit the European Union on June 23, when it fell from June’s 112.6.
Prime Minister Theresa May has said she will not start the formal divorce procedure from the EU by triggering Article 50 of the EU Lisbon Treaty until next year, to allow time to come up with a negotiating stance.
Once the UK shows its hand on Brexit and invokes Article 50 things could change for the worse quickly.