Factory Growth in Britain Has Slowed Due to Coronavirus And Brexit

A survey published Monday, February 1, showed that British manufacturers faced a double whammy last month due to global shipping disruptions due to the outbreak of a new wave of the Coronavirus, accompanied by new trade barriers with the European Union.

Separate data from the Bank of England showed a record drop in consumer borrowing in December, which could pave the way for a spending recovery once the epidemic subsides.

But for now, the data paints a picture of the struggling UK economy in early 2021 as Finance Minister Rishi Sunak considers whether to extend the emergency support programs.

Data company IHS Markit said the monthly factory sector survey showed new export orders had been hit and indications of supply chain problems and inflationary pressures.

The final reading of the IHS Markit Manufacturing Purchasing Managers’ Index in the euro area fell to 54.1, below the level recorded in the euro area and down from a three-year high of 57.5 in December, when factories scrambled to overcome problems that arose as Britain began new trade relations. With the European Union on the first of January. Smaller factories were the worst affected.

Rob Dobson, director at IHS Markit, said Britain’s rapid COVID-19 vaccination program and the progress companies have made in adjusting to Brexit may be the reason behind a faster growth recovery.

Data from the Bank of England on Monday showed that unsecured lending to consumers was 7.5% lower in December compared to the same period a year earlier, the biggest drop since registration began monthly in 1994.