The following two items suggest that the falling value of the pound is starting to have an impact on exports and imports. The Guardian reports that there has been a big jump in exports on the back of the weaker pound which has triggered a sharp drop in Britain's trade deficit with countries outside the European Union, while there are signs that cost pressures in industry are easing, suggesting some relief for hard-pressed manufacturers. Exports soared by 12.8% while imports dropped 5.4%. The overall trade in goods deficit shrank to £7.3bn from £7.8bn. Link to article.BBC news reports that many tourist attractions in the UK have seen an increase in visitors over the Easter period, both from within the UK and from abroad. Link to video
Will a weaker pound always have a positive impact on the trade deficit? What factors will determine whether the UK benefits or not?
Will a weaker pound always have a positive impact on the trade deficit? What factors will determine whether the UK benefits or not?
2 comments:
It would depend on how attractive our exports are to the rest of Europe and outside that too, cus this would determine whether they would be interested in buying what we have to sell to them, particularly when they can get more for their money. For example, it's probably Christmas morning for the fishing industry (we export a lot to Europe) while the Pound is weak.
I think that at the end of the day, it is down to the demand for what we export due to the Economic times, i.e what people/foreign governments see necessary to import off us in bad economic times.
I agree with Sambo
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