Pound Sterling remained broadly flat against the euro at €1.14 this morning, as the Prime Minister travels to Belfast for two days of talks. But the GBP dipped to a two week low against the US dollar, slipping to $1.3013 from an early morning trading price of $1.3036. The sharp fall came after the latest IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) score fell to 50.1 in January from 51.2 in December.
This is its lowest level since July 2016 and only just above the 50 mark that separates growth from contraction.
New orders fell for only the second time since the financial crisis, while employers in the services sector cut jobs for the first time since late 2012 – the last time Britain flirted with recession.
The latest figures come ahead of a crunch meeting between Bank of England officials on Thursday where they will announce their latest interest rate decision and new forecasts for the economy.
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IHS Markit chief business economist Chris Williamson said: “The latest PMI survey results indicate that the UK economy is at risk of stalling or worse as escalating Brexit uncertainty coincides with a wider slowdown in the global economy.
“The survey results indicate that companies are becoming increasingly risk-averse and eager to reduce overheads in the face of weakened customer demand and rising political uncertainty.”
This comes as Theresa May travels to Northern Ireland where she will attempt to reassure people she can secure a Brexit deal that avoids a hard border with Ireland.
She is expected to say in her speech she will find a way to deliver a Brexit that honours “commitments to Northern Ireland” and “secures a majority” in Parliament.
Ms May will return to Brussels in an attempt to gain more concessions on the crucial Irish backstop but the EU’s chief negotiator Michel Barnier has insisted there was “full agreement” the Withdrawal Agreement “cannot be reopened”.
European Commission Secretary General Martin Selmayr has lashed out at Brexiteers and claimed “nobody is considering” legally binding changes to the divorce deal.
But German Chancellor Angela Merkel insisted it was time to be “creative” and said an agreement can be reached if everyone “shows good will”.
She said: “There are definitely options for preserving the integrity of the single market even when Northern Ireland isn’t part of it because it is part of Britain while at the same time meeting the desire to have, if possible, no border controls.
“To solve this point you have to be creative and listen to each other, and such discussions can and must be conducted.
“We can still use the time to perhaps reach an agreement if everyone shows good will.”