The UK Composite PMI for August jumped higher and surprised sharply to the upside at 53.6 (vs 50.8 expected and 47.6 in July) thanks to a strong recovery of both its Manufacturing and Services components. This is an encouraging signal after the shock result of the June 23 referendum and the poor July readings of all PMI indices.
These are only very short term indicators, however. In our view, it is well too soon to conclude that the impact of the Brexit process and all its unknowns on UK growth will be mild. This impact can still be felt through multiple channels that include corporate investment, consumption and the real estate market.