UK economy shrinks at fastest rate in 7 years

The PMI survey of economic activity released today by Markit showed the biggest drop in 7 years.  The figure came in at 47.7 and was significantly lower than the consensus forecasts of 49.  A figure below 50 indicates a slowing economy. The figure was the worst since April 2009 when the UK economy was still struggling in the wake of the global financial crisis. Sterling weakened over 1 per cent against the US dollar to $1.314, lifting the prices of FTSE stocks with US dollar earnings, but the stock market rose generally as the poor data raised expectations that the Bank of England will cut interest rates and reaffirm their stated intention to step in to stimulate the economy.