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.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

China hails human rights progress amid calls to close detention camps

Closing the gap in accelerating women’s rights: the role of medical students

EU is right place to tackle pandemic, but reform is needed, latest survey finds

Mosquitoes are helping to fight one of the world’s fastest spreading viruses – this is how

Building social good – lessons from an Asian giant

COVID-19 vaccines: MEPs call for more clarity and transparency

How to change the world at Davos

There is no recipe for a healthy mental state

Does the West play the Syrian game in Egypt?

This company is breeding millions of insects in the heart of London

Here’s how to close the $176 billion health financing gap

COVID-19: MEPs free up over €3 billion to support EU healthcare sector

Burundi election countdown amid ‘deteriorating’ human rights situation

Secure 5G networks: Commission endorses EU toolbox and sets out next steps

What lessons to draw from the destruction of Syria

Ozone on track to heal completely in our lifetime, UN environment agency declares on World Day.

Situation in central Mali ‘deteriorating’ as violence, impunity rise, UN rights expert warns

Aung San Suu Kyi defends Myanmar from accusations of genocide, at top UN court

If people aren’t responding to climate warnings, we need to change the message

De-escalation of fighting in Hodeida is key to ‘long-overdue’ restart of Yemen peace talks: UN envoy

Trade protectionism and cartels threaten democracy

Will the outcome of the UK referendum “calm” the financial markets?

What you need to know about the European Green Deal – and what comes next

“Is Europe innovative? Oh, Yes we are very innovative!”, Director General of the European Commission Mr Robert-Jan Smits on another Sting Exclusive

What is true and not true about the new Coronavirus?

EU–US: What is the real exchange in a Free Trade Agreement?

The new EU “fiscal compact” an intimidation for all people

Forget 2009, this is the real credit crisis of our time

CLIMATE CHANGE FOCUS: The fruits of sustainability and decent work

Women in Switzerland have gone on strike – this is why

Monday’s Daily Brief: global homicide figures, neo-Nazi recruitment, Kashmir, and migrants’ plight in USA

Here are 4 ways investors can influence more secure and responsible innovation

An economist explains how to go carbon neutral in our lifetime

These countries are ranked highest – and lowest – for human development

We need to rethink the way we heat ourselves. Here’s why

Human rights breaches in Guinea Conakry and Madagascar

What has changed in the French politico-economic horizon

Countdown To GSMA Mobile World Congress Shanghai 2018 Is On

How innovation from within is transforming International Organizations as well as lives

Human Rights breaches in Russia, Afghanistan and Burkina Faso

Security Council must ‘come together’ to address the plight of children trapped in armed conflict, says UN envoy

International Criminal Court acquits former president Gbagbo of war crimes in Côte d’Ivoire

How Finland is fighting fake news – in the classroom

UN envoy commends successful conclusion of Guinea-Bissau presidential election

How the tech world could make nonprofits a more powerful force

Libya: EU efforts should focus on protecting migrants, MEPs say

High-tech or ‘high-touch’: UK survey gives clues to the jobs of the future

‘This is a time for facts, not fear,’ says WHO chief as COVID-19 virus spreads

Libya: $202 million needed to bring life-saving aid to half a million people hit by humanitarian crisis

FIAT Chrysler: from Geneva Motor show to the World, and back

Parliament adopts InvestEU programme for strategic and innovative investments

INTERVIEW: UN’s top official in North Korea foresees ‘surge’ in humanitarian aid

UK voters sent strong message to May and Corbyn for soft Brexit

Climate changes and the imminent public health crises

EU and China sign landmark agreement protecting European Geographical Indications

The smartest cyber investment is collective action. Here’s why

UN chief underscores value of cooperation with Southeast Asian countries

Resolving Israel-Palestinian conflict, ‘key to sustainable peace’ in the Middle East: Guterres

Young? You should work out the entrepreneurial heart before the mind

Female African coders ‘on the front-line of the battle’ to change gender power relations: UN chief

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