LONDON, Aug 1: Britain’s manufacturing sector shrank at its fastest rate in more than three years in July, the latest PMI survey showed on Wednesday, dealing a blow to hopes the country may come out of recession over the summer.

The grim figures fuelled expectations that the Bank of England will add further stimulus once its current 50 billion pound plan to buy government bonds with newly created money ends in November. Britain slipped into its second recession in four years around the turn of the year, and the economy contracted by a further 0.7 per cent from April to June due to government spending cuts, eurozone turmoil, bad weather and an extra public holiday.

Economists have been betting that some of the output lost will be recovered in the third quarter, but the Markit/CIPS Manufacturing Purchasing Managers’ Index’s drop to 45.4 from a downwardly revised 48.4 in June pointed to another contraction.—Reuters