The Nikkei in Toyko plunged 7.3 per cent after HSBC’s flash survey found that manufacturing activity in China contracted in May for the first time in seven months, in another sign of the weakness of recovery in the world’s second-largest economy.
IMF calls for UK government to stimulate growth
The International Monetary Fund has called on the UK government to take more action to boost the economy, which it warns is “still a long way from a strong and sustainable recovery”, reports The Guardian.
It said the £10bn-worth of spending cuts and taxes planned for the coming year would be a “drag on growth” and urged the government to do more to stimulate the economy.
China data adds urgency to stimulus calls
According to China’s political calendar, big decisions about economic policy this year are supposed to wait until the autumn, when a major meeting of the Communist party brings together the country’s top leaders, reports the Financial Times.
But a deteriorating economic landscape, highlighted by a new survey of industry, could overwhelm the political calendar and test the new government’s resolve to refrain from deploying short-term fixes for sluggish growth.
The purchasing managers’ index for the manufacturing sector is on track to fall to a seven-month low of 49.6 in May from 50.4 in April, according to a preliminary survey published by HSBC. The decline was worse than expected and, in dropping below the index’s midpoint of 50, it signaled that China’s industrial activity had started contracting.
Sterling is pounded as a fall in sales shows green shoots are still fragile
The pound slammed into reverse on Wednesday as a sharp fall in high street sales dented hopes Britain is on the road to a steady recovery, reports the Daily Mail.
Figures from the Office for National Statistics showed retail sales fell 1.3 per cent in April – a far worse performance than expected, as bad weather hit spending.
It sent sterling down to as low as €1.1644 against the euro and $1.5076 against the dollar on a grim day for the UK currency.
Halfords cuts dividend to focus investment on revamping stores
Matt Davies, who joined as chief executive from Pets at Home last year, said that Halfords was cutting its final dividend by a third from 14p to 9.1p, reports the Daily Telegraph.
This followed a 25 per cent fall in Halfords’ pre-tax profits to £71m in the year to March 31.