UK economy is like a ship heading for an iceberg, report

Economic activity is retreating at the fastest rate since the on-set of the financial crisis...

UK economy is like a ship heading for an iceberg, report

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Ahead of the Bank of England's meeting tomorrow it has been confirmed that economic activity in the UK is declining at its fastest rate since the financial crisis.

The final reading for the UK's PMI index for July was 47.4, down from 52.3 in June. Any figure below 50 indicates contraction.

A combined index of services and manufacturing data offered a reading of 47.3 - down from 51.9 in June.

These results will increase pressure on The Bank of England to cut interest rates or offer other stimulation measures tomorrow.

Meanwhile, A hard-hitting report by the Adam Smith Institute said the Bank of England's stress tests were "like having a ship radar system that cannot detect an iceberg."

The libertarian think-tank argued the flawed "health checks" masked the ability of British banks to cope with another major economic shock and accused the Bank of England of being "asleep at the wheel again."

The study highlighted 13 flaws in the stress test, which was compared to a "ridiculously easy exam with a ludicrously low pass rate."

It argued every single UK lender would currently fail "more rigorous" stress tests by the US Federal Reserve.

The research warned the UK is "sailing blindly into a second global financial crisis" and has called on the stress tests to be ditched, with decision-makers instead forced to be personally liable for risks.

Irish gloom

A new report on the Irish economy from Goodbody has downgraded its growth outlook.

Its predicted growth rate for 2016 is now 4.2% - down from 5%. Looking further ahead its forecast rate for 2017 falls from 4.4% to 3.7%.

This is a reflection of increased uncertainty caused by the Brexit vote.

It says that the effects of the result of the referendum will take the shine off another year of strong growth - it described the current outlook as "unusually clouded."

Additional reporting by IRN