Will Cameron succeed in keeping UK inside the EU and reverse the present economic downturn?

Mr David CAMERON, UK Prime Minister. Date:18/3/2016. Location: Brussels / © European Union / Source: TV Newsroom European Council

Mr David CAMERON, UK Prime Minister. Date:18/3/2016. Location: Brussels / © European Union / Source: TV Newsroom European Council

Markit released yesterday its Chartered Institute of Procurement and Supply (CIPS) Services Purchasing Manager’s Index (PMI) which rose to 53.7 in March showing that the UK services growth has only slightly increased compared to February’s 52.7. Also, the first quarter of this year was characterized by Markit analysts as the weakest in terms of output services growth since the first quarter of 2013.

The economic prospects of the second-largest economy in the European Union (EU) are further decreasing with the downfall of the Steel Industry. The British government is attempting to save thousands of jobs which are at stake since Tata Steel Ltd. has stated that will sell all its British assets.

Among the influential factors that urged the slowdown of the services expectations were the global economic uncertainty and the UK referendum which will be held on 23 June and will finally show whether Britain wants to be be “in” or “out” of the EU.

Manufacturing and Construction show similar trend

Markit/CIPS UK Construction PMI didn’t change compared to February, remaining at 54.2; above the 50.0 neutral value which separates contraction from expansion. The data of the survey regarding construction companies show that employment growth rate has been decreased highlighting the level of low confidence in the sector’s prospects. As Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, pointed out: “March’s survey confirms that the UK construction sector is experiencing its weakest growth phase since the summer of 2013”.

As far as Markit/CIPS UK Manufacturing PMI is concerned, the latest press release indicated that the first quarter of 2016 was among the weakest ones during the past three years. More specifically, the Index reached 51.0 in March, just a 0.2 increase since February. The sluggishness of the  manufacturing sector was also confirmed by Rob Dobson, Senior Economist at survey compilers Markit who mentioned that: “The UK manufacturing sector remained in the doldrums during the opening quarter of the year. Although March saw modest improvements in the trends for production and new orders, industry is still hovering close to the stagnation mark and will struggle to make a meaningful contribution to the next set of GDP growth figures”.

Consequently, the two aforementioned sectors were not enough to support UK’s economic growth. What is more, neither the services sector’s slight increase could reverse the downturn of the economy. More in detail, Chris Williamson, Chief Economist at Markit, stated on the issue: “An upturn in the pace of service sector growth in March was insufficient to prevent the PMI surveys from collectively indicating a slowdown in economic growth in the first quarter. The surveys point to a 0.4% increase in GDP, down from 0.6% in the closing quarter of last year. Across the three main sectors of the economy, firms reported the smallest increase in demand for just over three years, which in turn fed through to a reluctance to take on new staff. March saw the weakest rate of job creation for over two-and-a-half years”.

UK Steel Industry in danger

Tata Steel Ltd. has been experiencing serious losses with its UK operations. Specifically, the company has lost 68 million pounds in the three months until February 2016 compared to Last Year to Date. The lower steel prices due to global imports, especially from China, and the high energy costs were among the main reasons for those losses. The negative figures have forced Europe’s second-largest steelmaker by production capacity to state that it will sell all its UK assets.

In view of such an event, the UK government has been seeking for a potential buyer in order to secure all the thousands of jobs that are about to be lost at an imminent closure of Tata’s UK plants. Sanjeev Gupta, a potential candidate to buy the firm, mentioned yesterday after his meeting with business secretary Sajid Javid: “I am pleased to report that we had a positive meeting today. UK government appears highly supportive and is proactively engaged in finding a long-term solution”.

However, it is not certain yet if Gupta’s plan will ensure that the UK plants will remain open and everyone will get to keep his job.

Will Cameron persuade the Brits to remain in the EU?

Whether UK will leave or stay within the EU is a matter that will be decided through a referendum on June 23 and will undeniably affect both Europe and Britain. The latest Telegraph poll is showing that the “Remain” campaign is ahead with only 1% when certainty to vote is taken into consideration. The strategy of David Cameron, UK Prime Minister, to promote the “Remain” vote shows signs of effectiveness since its percentages are rising.

It seems that David Cameron is winning votes when presenting a very intimidating future to the British voters in case UK leaves the EU. Particularly, the UK Prime Minister stressed on the Daily Telegraph that: “A Brexit would be an act of economic and political self-harm which would badly damage British airlines, car manufacturers and financial services companies. Leaving the single market would hit our service industries hard and would be needless and reckless”.

All in all, it is probable that the UK will experience the negative consequences that David Cameron is mentioning in case of the “Leave” scenario. Besides, one of the main reasons that all sectors are slowing down is just because a referendum about Britain’s “in” or “out” the EU uncertainty.

There are still more than two months left till the UK referendum, which is more than enough to cause more turbulences in the economic and political European framework.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Palestinian Bedouin community faces demolition after Israeli court ruling, warns UN rights office

European Youth Capital 2019 announced: Novi Sad, Serbia

Not enough resettlement solutions for refugees worldwide, says UN

MEPs cap prices of calls within EU and approve emergency alert system

Could the fourth wave of globalization help to end epidemics?

EU’s tougher privacy rules: WhatsApp and Facebook set to be soon aligned with telcos

A silent killer: the impact of a changing climate on health

Local innovation, international impact: SMEs and the ITU Telecom World Awards

GDPR and the World Cup have these 4 things in common

Consumer protection: Deal on EU-wide rules for those sold faulty products

For how long and at what cost can the ECB continue printing trillions to keep euro area going?

Businesses, governments and consumers to implement a more climate-friendly approach to #BeatPlasticPollution on World Environment Day 2018

Brexit mission impossible: Theresa May was so desperate that had to appoint Boris Johnson as Foreign Secretary

Eurozone: New data show recession and debt closer to explosion

Afghanistan: Bring ‘architects’ of latest ‘appalling’ suicide bombing to justice, says deputy UN mission chief

The 4 types of leader who will thrive in the Fourth Industrial Revolution

Here’s how to make ‘value-based healthcare’ a reality

Russia – US in Syria: Selling Afrin to Turkey but facing off ruthlessly for Ghouta

How do you get people to trust self-driving vehicles? This company is giving them ‘virtual eyes’

Fostering global citizenship in medicine

“Working together to make a change at the COP 21 in Paris”, an article by Ambassador Yang of the Chinese Mission to EU

European Youth Forum @ European Business Summit 2014: European Youth Unemployment

UN chief welcomes ‘positive steps’ towards peace between Eritrea and Ethiopia

Reintegrating former rebels into civilian life a ‘serious concern’ in Colombia: UN Mission chief

Spotlight Initiative – EU and UN fight against domestic violence in the Pacific region

Why we need both science and humanities for a Fourth Industrial Revolution education

The Netherlands is paying people to cycle to work


Re-thinking citizenship education: bringing young people back to the ballot box

“The Sea is vast as it admits all rivers”, Ambassador Yang Yanyi of the Chinese Mission to EU gives her farewell address in Brussels

On European immigration: Europe’s Missing Citizens

Europe is no longer an innovation leader. Here’s how it can get ahead

The Italian ‘no’ and France’s Fillon to reshape Europe; Paris moves closer to Berlin

Lost in translation

The West and Russia took what they wanted from Ukraine

How the United States can win back its manufacturing mojo

MWC 2016 Live: Roshan CEO opens up on Afghanistan challenges

Human rights champions from across the world receive top UN prize

EU Budget 2019: no deal before the end of the conciliation period

Back to school: Schoolchildren to receive milk, fruits and vegetables at school thanks to EU programme

Opening Remarks by H.E. Ambassador Yang Yanyi, Head of the Chinese Mission to the EU at the Chinese Fashion Night

Philippe de Backer of ALDE at European Business Summit 2015 stresses: “Reinvent your business”

The unique role of business in building social good

Superbugs: MEPs advocate further measures to curb use of antibiotics

Roxane in Cambodia

Inflation down to 0.7%, unemployment up at 12.2%: Bad omens for Eurozone

The 13th round of TTIP negotiations hits a wall of intense protests and growing concerns

Impact Investment needs global standards and better measurement

COP24: World sports join team UN in race against climate change

UN chief appoints Luis Alfonso de Alba as Special Envoy for the 2019 Climate Summit

How women are transforming the Arab world’s start-up scene

We need greater protection for our oceans. We can’t let politics stand in the way

Fake news: What it is, and how to spot it

Corruption In The Balkans Is Impeding EU Membership

European Semester 2018 Spring Package: Commission issues recommendations for Member States to achieve sustainable, inclusive and long-term growth

UN, Egypt help avert another Israel-Palestine war in Gaza that was ‘minutes away’, Security Council hears

ILO: Progress on gender equality at work remains inadequate

Here are three technology trends changing the way you travel

Parliament commemorates the victims of the Holocaust

Trump badly cornered at home by agribusiness and steel consumer lobbies: Trade

France v Croatia: How the World Cup finalists stack up off the pitch

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s