Rebound in August U.K. PMIs May Not Be Sustainable: Barclays
Source: BFW (Bloomberg First Word)
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Andrzej Szczepaniak (Barclays PLC)
Fabrice Montagne (Barclays PLC)
David Cameron (United Kingdom of Great Britain and Northern Ireland)
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UUID: 7947283
(Bloomberg) -- Broad-based gains in August U.K. PMIs may overestimate the post-referendum policy relief and may not be sustainable, Barclays economists Fabrice Montagne and Andrzej Szczepaniak write in a client note.
Alert: HALISTER1- Barclays maintains call for a 20bps rate cut in November
- August PMIs rebounded due to three powerful policy relief dynamics providing reassurance to U.K. businesses
- Quick transition to Theresa May from David Cameron
- BOE’s “muscular policy response” assures firms that central bank is willing to go to lengths to avoid abrupt economic adjustment
- Growing expectation that previous fiscal austerity plans will be scrapped in the Autumn Statement
- Brexit uncertainty is far from over, underscored by comments from world leaders at G-20
- Weaker-than-expected official economic activity data for July may knock some of the recent PMI-inspired confidence
- Drag on confidence may be amplified if there are “unnecessary delays” in triggering Article 50 or if no substantial reassuring fiscal policy package is forthcoming in the coming months
- PMI data contrasts with 3Q CBI Services Sector Survey, which showed a sharp fall in business optimism and falls in investment and employment intentions over the next six to twelve months
Source: BFW (Bloomberg First Word)
People
Andrzej Szczepaniak (Barclays PLC)
Fabrice Montagne (Barclays PLC)
David Cameron (United Kingdom of Great Britain and Northern Ireland)
To de-activate this alert, click here
UUID: 7947283