Rolling coverage of the latest economic and financial news, as City investors fear the US-China trade war is intensifying

• Latest: UK manufacturing shrank in May
• Beijing: US’s exorbitant demands have scuppered trade deal
• China’s new trade white paper criticises US
• Trump’s Mexican tariff threat worries investors...
• .... US also considered Australian trade war (!)

9.51am BST

The UK factory sector was buffeted by ongoing Brexit uncertainty again in May, says Rob Dobson, dragging the PMI to a near three-year low.

He also fears that British manufacturing could continue to shrink in the comping months.

The trend in output weakened and, based on its relationship with official ONS data, is pointing to a renewed downturn of production.

“New order inflows declined from both domestic and overseas markets, as already high stock levels at manufacturers and their clients led to difficulties in sustaining output levels and getting agreement on new contracts.

9.41am BST

Newsflash: Britain’s factory sector has suffered its worst contraction since the EU referendum almost three years ago.

Data firm Markit reports that new orders and employment both declined last month, hit by Brexit uncertainty and the knock-on impact of the US-China trade war.

New order inflows deteriorated from both domestic and overseas sources. New export business fell for the second month running and at the quickest pace in over four-and-a- half years. Manufacturers reported lower demand from Asia and Europe.

There was also mention of Brexit uncertainty, including clients diverting supply chains away from the UK, leading to lower demand from within the EU.