Businesses in London and the south-east hardest hit by Brexit

Economic downturn: London businesses are the hardest hit in the UK by Brexit
Dan Kitwood/Getty Images
Jamie Micklethwaite8 August 2016

Businesses in London have been the hardest hit in the UK since the Brexit vote, figures show.

The latest Lloyds Bank Purchasing Managers Index has shown that business activity in London has fallen by four points in just one month - the steepest drop in the country.

Activity in London plunged to 44.4 last month, which is the lowest level seen in the capital for more than seven years.

Any reading below 50 shows the economic rate is falling and the lower the number, the greater the rate of decline.

Lloyds Banking Group’s managing director of mid-markets and SME banking, Tim Hinton said: “As expected, business activity has slowed on the back of the EU referendum result.

“While the impact has been felt across the UK, companies in the south-east and London were hit particularly hard.

“UK firms will likely face challenges in the short-term but the Bank of England’s decision to cut interest rates could help crystallise important investment decisions and in turn support the economy.”

This is the first time businesses across England and Wales have reported a decrease in output in July since 2012.

The downturn seen across the country reflected a big drop in new orders and businesses facing rising costs on the back of a weaker sterling.

July also saw employment growth fall for the first time since 2013.

The Lloyds Bank PMI is based on responses from businesses in the manufacturing and service sectors about the value of goods and services during July compared with a month earlier.

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