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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 videoWill a weaker pound always have a positive impact on the trade deficit? What factors will determine whether the UK benefits or not?
Consumer Prices Index (CPI) inflation fell slightly in January to 3%, from 3.1% in December, figures have shown. CPI inflation has now fallen for four months in a row from a high of 5.2% in September, driven down by falls in energy costs and fuel prices. Retail Prices Index (RPI) inflation, which includes mortgage costs and is often used in pay negotiations, fell to 0.1% from December's 0.9%. The drop in RPI may lead to pressure on employers to limit pay rises. The headline RPI rate of 0.1% is the lowest rate it has been since 1960. In addition to falling energy prices, the reduction in VAT from 17.5% to 15%, announced in the pre-Budget report in November, also had an effect.
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.
