British prime minister Theresa May has said she wants Britain to become a global leader in free trade as it exits the EU.

Speaking after the two-day G20 summit in China, she said there would be no retreat towards protectionism and that there had been positive reactions from partners about securing new trade deals.

However, US president Barack Obama offered Britain little hope of a fast-track post-Brexit trade deal, despite saying he would work to ensure the economic relationship between the two nations does not unravel.

New data yesterday indicated that Britain’s economy has bounced back from the initial shock of June’s Brexit vote, but a big slowdown in growth and a further Bank of England rate cut remain on the cards.

The latest services sector PMI, from data firm Markit, showed a record leap in activity in August, echoing similar data released last week for the much smaller manufacturing and construction sectors.

Sterling hit a four-week high against the euro and a seven-week peak against the dollar on the strength of the PMI data, but stalled against both later in the day, partly due to thin trading due to the Labor Day holiday in the US. 

Markit said its survey showed Britain’s economy was unlikely to enter a recession in the July-September period.

However, Markit said the UK economy was likely to have slowed to a crawl this quarter, growing by just 0.1%, compared with 0.6% in the second quarter.

This would be in line with the Bank of England’s projections made last month when it cut interest rates for the first time since 2009, and said most of its rate-setters expected to cut them again before the year’s end.

A survey from the EEF manufacturers body yesterday gave the weakest outlook for investment since late 2009, and auto industry data showed that while businesses were buying new cars for their fleets, private buyers were holding off.

Markit economist Chris Williamson said challenges lay ahead as Britain leaves the EU and tries to secure a new trade deal, a process which could drag on until 2019 or longer.

Japanese prime minister Shinzo Abe yesterday asked Ms May to provide more clarity for Japanese companies operating in Britain, following a warning from the country’s finance ministry that Japanese banks could leave London.

Shares in UK banking giants RBS and Lloyds slumped, yesterday, after being downgraded by Deutsche Bank analysts. 

Lloyd’s of London, meanwhile, said it will transfer some business to the EU if Britain doesn’t get single market access after it leaves.

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