As business activity shrank at its fastest pace since the last recession seven years ago, the U.K.’s decision to leave the European Union inflicted an immediate blow on the economy.

Markit Economics said in a one-time report published on Friday, there was a “dramatic deterioration” in the weeks following Brexit. A gauge of the private-sector economy plunged to 47.7, well below the 50 level that divides expansion from contraction and the services and manufacturing shrank.

The assumption that politics is propelling the world’s fifth largest economy into recession is strongly evidenced by the slump. Pressure on the government to reverse fiscal austerity and on the Bank of England to deliver fresh monetary stimulus is intensified by this slump. With Markit saying its latest readings put the economy on course to contract by 0.4 percent this quarter, the pound dropped after the report was published.

“July’s PMI certainly points to more easing. We’ve seen a variety of business measures fall to levels not seen since the financial crisis. Although consumer confidence might hold up for the next few months, businesses are putting the brakes on investment,” said Samuel Tombs, an economist at Pantheon Macroeconomics in London.

Services, the biggest part of the economy, dropped to 47.4. Noting the biggest drop on record, the slide in the composite Purchasing Managers’ Index was sharper than economists had predicted. In 2009, the global financial crisis had helped push the U.K. into five straight quarters of contraction and this slump is the lowest since then. An “international hurricane” was battering the world economy, the then Prime Minister Gordon Brown had said.

“The downturn, whether manifesting itself in order-book cancellations, a lack of new orders or the postponement or halting of projects, was most commonly attributed in one way or another to Brexit,” said Chris Williamson, chief economist at Markit.

To provide clarity on the impact of the referendum, Markit released the survey based on about 70 percent of usual replies and collected the data between July 12 and July 21.

Questions on the impact on the international economy are also raised in the report. The Group of 20 nations officials, who are meeting in China this weekend, are planning to say they’re capable of dealing with the economic fallout of Brexit and the IMF downgraded its global growth forecast this week.

A key question will be whether the signs of weakness persist or just reflect an initial post-referendum shock for BOE Governor Mark Carney and fellow officials debating whether the U.K. economy needs more stimulus. A powerful argument for swift action would be provided by the slump in the PMI, Williamson said.

The U.K.’s political circumstances don’t favor a reversal of the vote even with a weakening economy. New Prime Minister Theresa May has adopted a new catchphrase: “Brexit means Brexit” and has ruled out repeating the referendum. Lawmakers in her Conservative Party would be infuriated by any attempt to back away from that pledge, they have said warning May as she enjoys her honeymoon as a new leader. Every Tory prime minister since Margaret Thatcher have been helped brought down by rows over Europe.

(Adapted from Bloomberg)

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