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

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

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

EU-US trade deal: Europe to Americanize its social model?

Switzerland to favour EU citizens in immigration quotas as the risk of a new referendum looms

Why climate change matters for future health professionals

GSMA Outlines New Developments For MWC19 Shanghai

Angola’s President João Lourenço calls for stronger EU-Africa cooperation

Sweden has invented a word to encourage people not to fly. And it’s working

EU Budgets: Europe hoping for Xmas gifts

How banks should prepare for robots going rogue

Electronic cigarette – is it really a safer alternative to smoking?

These countries are leading the charge to clean energy

End fossil fuel subsidies, and stop using taxpayers’ money to destroy the world: Guterres

Amid continued suffering in Yemen, UN envoy welcomes reports of reduced violence

Here are three ways Africa’s youth are defeating corruption

The psychology of pandemics

Syrian Government’s ‘different understanding’ of UN role, a ‘very serious challenge’ – Special Envoy

Talent is worldwide. Opportunity is not. How can we redistribute it?

The 10 most common types of plastic choking Europe’s rivers

Is China about to launch its own cryptocurrency?

Doctors vs. Industry 4.0: who will win?

Employment and Social Developments in Europe: 2018 review confirms positive trends but highlights challenges, in particular linked to automation and digitalisation

It’s not your imagination, summers are getting hotter

Killing of Egyptian peacekeeper in Mali ‘may constitute war crimes’ Guterres warns, urging ‘swift action’

Spanish vote – bad luck for Greece: Does Iphigenia need to be sacrificed for favourable winds to blow in Eurozone?

‘Historic moment’ for people on the move, as UN agrees first-ever Global Compact on migration

Europe must regain its place as world leader in digital technology

These companies can recycle nearly anything, from cigarette butts to fax machines

Arrest of three Libyans wanted for grave crimes ‘would send strong and necessary message’ to victims, urges top Prosecutor

What does strategy have to do with a platform approach?

Guatemala Dos Erres massacre conviction welcomed by UN human rights office

Skeptic France about Trump-Juncker trade deal favoring German cars; EU’s unity in peril

This plastic-free bag dissolves in water

Why strive for Industry 4.0

Is Erdogan ready to tear down the bridges with Europe and the West?

Parliament adopts its position on digital copyright rules

Inclusion and diversity isn’t just good for employees – it’s good for the bottom line

China by numbers: 10 facts to help you understand the superpower today

The Indian case: health policies need to keep pace with public health literacy

Eurozone: Sovereign debt decreases for the first time since 2007

This solar-powered car lets you drive for free

‘Comprehensively include migrants’ or sustainable development won’t happen, warns General Assembly President

One in three fish caught never gets eaten

The US calls off globalization, targets Germany. Paris offer to Berlin comes at a cost

Nicaragua must end ‘witch-hunt’ against dissenting voices – UN human rights experts

‘InvestEU’ programme: big boost for jobs, growth and investment

The future of science could be in your gut. Here’s why

Access to health in the developped and developing world

Mosul’s ‘3D contamination’ adds to challenges of deadly mine clearance work

Parliament to ask for the suspension of EU-US deal on bank data

How did Facebook fool the Commission that easily during the WhatsApp acquisition?

Peru should help more young vulnerable people into work

Traditional finance is failing millennials. Here’s how investing needs to change

G7 summit: Trump Vs. G6 leaders on trade and climate change

Security Council approves ‘historic’ political Haiti mission, ending UN peacekeeping role in the country

A Sting Exclusive: Towards better business opportunities for the EU and its neighbours, Commissioner Hahn live from European Business Summit 2015

Unanswered questions for Europe’s youth in President Juncker’s State of Union

Vegans in France are using extreme tactics to stop people eating meat

The Eurogroup+ is born to govern the EU Banking Union

This project is turning abandoned fishing gear into volleyball nets

Deep fakes could threaten democracy. What are they and what can be done?

IMF’s Lagarde: Estimating Cyber Risk for the Financial Sector

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