1.5869 trades the low as I type and the UK’s biggest growth marker slumps. In the past year the index has dropped 10% from the highs at 62.5 back in Oct 2013
Nearly all indicators are pointing down except for one, labour. If the data continues to tumble then we’re likely to see job gains slow and even jobless numbers increase. If that happens then the market will start striking though their rate expectations further.
The Markit survey still saw respondents adding to the workforce even as orders fell. On the other side, there was also another rise in backlogs of work which highlights that companies are still not ready to fully commit to extending capacity and would still rather use the current workforce to do the work. At best it looks like we could well see a flattening in employment and at worst labour going backwards.
Today’s number won’t bode well for GDP into the year end and with the Bank of England inflation report next week, His Royal Carneyness could be in for a rough ride from the press. It’s going to be a big event as it will be the last time the BOE will give it’s main public forecasts for the economy into the end of the year and a clue on how the UK is expected to perform into the new year.
A long way to go until then and plenty of room for the pound to go walk about too.
