PARIS Growth will continue to slow in Britain following a shock vote to leave the European Union before stabilising around a lower pace towards the end of the year, the OECD said on Thursday in its flagship monthly economic indicator.
The Paris-based Organisation for Economic Cooperation and Development had suspended the publication of its leading indicators for two months in July because of Britain’s June 23 referendum which it said could have made the data misleading.
In its first release since the Brexit vote, the OECD said its composite leading indicator (CLI) for Britain rose to 99.32 in July from 99.29 in June, remaining below the long-term average of 100 it fell under last October.
“Although there remains uncertainty about the nature of the agreement the UK will eventually conclude with the EU, the volatility in data that emerged in the weeks immediately following the referendum appears to have reduced,” it said.
“Assuming this remains the case for the next 6 months, the current assessment for the United Kingdom points to growth continuing to slow, before stabilising around a lower rate towards the end of the year,” it added.
The indicator, meant to flag early signals of turning points in economic activity, showed stable growth momentum in the United States, Japan and the euro area as a whole, including Germany, the organisation said.
The indicator for the United States edged down to 99.03 in July from 99.10 in June, while it improved in China to 99.22 from 99.02.
There were improvements amongst major emerging economies, the OECD said, with the CLIs showing growth was picking up in China, Russia and Brazil and firming up in India.
The index for Brazil reached 100.34 in July, the first time it topped the 100 mark since March 2013.
On the other hand, growth was expected to ease in France, while the CLI for Italy pointed to a more severe weakness in growth momentum, the OECD said.
Their respective indicators fell to 100.33 in July from 100.44 the previous month and 100.21 from 100.43, still above their long-term average, however.
(Reporting by Michel Rose; Editing by Leigh Thomas)
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