UK exports grow at fastest level in two years on weak pound

UK manufacturing exports, boosted by the weak pound, grew at their fastest pace in more than two years over the past three months, a new report shows.

The latest Confederation of British Industry (CBI) industrial trends survey showed that manufacturing output grew at a “healthy pace” while demand expanded in the three months to October.

The survey explained that sterling weakness played its part in boosting exports. “Respondents who experienced greater overseas appetite for their goods attributed it to the depreciation of sterling,” the CBI said. It added: “Firms’ perception of their competitiveness within the EU climbed to an all-time high and competitiveness in countries outside the bloc improved at its fastest since April 2009.”

Sterling has fallen nearly 20 per cent against the dollar since the referendum vote, raising hopes that cheaper UK goods would be more competitive on the global market. “Still, the pound’s weakness came as a mixed blessing as average unit costs climbed at the fastest pace in three-and-a-half years,” the survey said.

“Accordingly, there are signs that this may be passed on through higher prices: manufacturers’ expectations for domestic price inflation rose to the highest since April 2014.”

PA