The National Institute of Economic and Social Research (NIESR), one of Britain’s leading economic think tanks, has said on Wednesday that UK’s economy slammed into reverse last July as exports failed to match imports while factory production eased back due to the impact of Brexit vote last June 23.
A monthly economic data from NIESR showed that growth in UK dropped to 0.3% for three months up to the end of July from 0.6% for three months up to the end of June.
The economic slowdown was due to decline in output last month as the gross domestic product (GDP) fell by 0.2%, showing a weak start for the third quarter and giving Britain an “evens” chance of slipping into recession by the end of 2017.
Last month’s low numbers on trade and manufacturing caused the pound to weaken against the dollar in the foreign exchange as the sterling once fell below $1.30. Yesterday, it closed at $1.3005.
Meanwhile, its top equity index FTSE continued its hot streak on Wednesday as it gained 0.2% to close at 6886.42 points brought by gains from strong financial stocks.
The US dollar closed lower against major currencies as investors already erased their hopes that the Federal Reserve will increase interest rates for the rest of 2016.
The dollar index closed at 95.66, down by 0.6%, on Wednesday.
The greenback went weaker against the Japanese yen as it fell 0.6% to settle at 101.31 per dollar after the surge on Japan’s core machinery orders which rose 8.3% last June. The euro also finished stronger against the dollar by 0.5% at 1.1174.
The Russian ruble made little change at 64.74 per dollar while the British pound closed flat at 1.3005 following NEISR data showing that UK’s economy dipped last month by 0.3%.