LONDON: British export growth picked up more momentum at the end of the year as the cheap pound continues to boost firms selling abroad, according to an index to be published today.
The export growth index from accountants BDO increased to a reading of 110.3, far above the 100 mark representing the long-term growth trend.The reading suggests British exports may have accelerated further at the end of the year from strong third-quarter growth.
The boost in exports over the course of the last 18 months has been caused by a pick-up in the global economy as well as the continued effects from the dramatic devaluation of the pound since the Brexit vote in June 2016.
Sterling remains almost 11 per cent weaker against the US dollar than levels seen two years ago, allowing some firms gain higher margins on products, particularly if their input costs are less exposed to foreign currencies.
The rate of year-on-year growth in export prices has also increased, suggesting UK exporters are pushing up the price of their goods, although higher input costs may also play a role.
The BDO figures, based on analysis of data from the European Commission, the Bank of England, and multiple business surveys, show the UK’s exports are growing far faster than comparable European economies, despite their stronger overall GDP growth.
Exports across the EU as a whole actually fell below their long-term growth rate, to a reading of 98.8 points, while German growth slowed slightly to record a reading of 101.7.
The figures underline the need of the government to secure “open and simple access” to foreign markets, according to Peter Hemington, a BDO partner.
He said: “The confidence of our exporters is high as overseas interest continues to increase following last year’s referendum. However, this confidence could quickly disappear as Brexit negotiations continue and a clearer picture develops about our future trade agreements.”
