Pound slides as Brexit uncertainty dents UK manufacturing

London, Sept 2 (AFP/APP):The pound slid once more Monday as data revealed a slump in UK manufacturing fuelled by Brexit uncertainty and wider global growth weakness, traders said.

Sterling was down around half a percent versus the dollar and euro approaching midday in London.

That helped lend strong support to London’s FTSE 100 shares index that features numerous multinationals earning in dollars and euros.

“Sterling fell out of bed as the UK manufacturing sector was shown to suffer its sharpest decline in seven years,” said Neil Wilson, chief market analyst at Markets.com.

The IHS Markit UK Manufacturing purchasing managers’ index dived to 47.4 in August, which was the lowest level since July 2012, languishing below the 50 mark that indicates growth.

Market expectations had been for an August print of 48.4, after 48 in July.

“High levels of economic and political uncertainty alongside ongoing global trade tensions stifled the performance of UK manufacturers in August,” said Rob Dobson, director at IHS Markit.

British Prime Minister Boris Johnson raised the stakes Monday in a pivotal week of the Brexit saga by threatening to purge ruling party lawmakers who try to block a no-deal divorce with the EU.

The warning came as UK Conservative heavyweights such as former finance minister Philip Hammond plotted a way to keep the premier from taking Britain out of the European Union without an agreement on October 31 amid warnings it could be disastrous for the economy.

Earlier Monday, most Asian stock markets fell after fresh Chinese and US tariffs on goods worth hundreds of billions of dollars kicked in, though US President Donald Trump reiterated that the two sides were still due to hold talks this month.

Hong Kong was additionally weighed down by another weekend of violence, fuelling worries about possible Chinese intervention in the financial hub, while the unrest has hit property firms and Macau’s casinos.