U.K. Economy Getting Worse in a Hurry

June 9, 2008

The sum of Britain’s manufacturing purchasing manager’s index (PMI) in May (50.0) and the sister index for service-producing industries, 49.8, added up to less than 100.0 for the first time since April 2003. Just nine months previously, the sum was 113.9, comprised of 56.1 in manufacturing and 57.8 in services. Since mid-2007, the two most widely monitored house price gauges have tumbled from +10.7%y/y to -3.8% (Halifax) and from +11.1% to -4.4% (Nationwide). British consumer confidence slumped from +99 last September to +69 in May, and April mortgage approvals constituted a record low. Since the end 0f 2007, on-year producer output price inflation has accelerated from 5.0% to 8.9%, and the underlying core PPI-O more than doubled to a 17-year high of 5.9% from 2.4%.



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