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British trade figures show weaker sterling benefits exporters
Last Updated: 2017-01-12 05:53 | Xinhua
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Trade figures released on Wednesday showed that the impact of the large fall in sterling in the wake of the Brexit referendum result is beginning to feed through to improved export performance for Britain-produced goods.

Sterling fell sharply on June 24 in the immediate aftermath of the referendum on June 23 which put Britain on a path to leave the European Union (EU).

Its decline from 1.48 U.S. dollars to the pound and is currently trading at 1.21 U.S. dollars.

This will feed through to increased prices for imports for British consumers and businesses, and to higher commodity prices for manufacturers, but it will also make British exports more competitive.

Evidence that this is underway appeared in the trade figures.

The three-month growth rate of goods export volumes rose from minus 2.7 percent in October to growth of 1.1 percent in November.

In addition, growth in import volumes slowed from a 4.2 percent increase to a 1.8 percent increase.

"This tentatively suggests that net trade may have made a positive contribution to GDP growth in the fourth quarter," said Paul Hollingsworth, economist at Capital Economics, a London-based data consultancy.

Dr Howard Archer, chief British economist with IHS Markit said: "A key hope for the UK economy going forward is that the substantial overall weakening of the pound since the UK voted to leave the EU will increasingly feed through to boost foreign demand for UK goods and services."

Manufacturing surveys report recent healthier foreign orders supported by the weakened pound.

In particular, the manufacturing purchasing managers' survey reported at the beginning of this month that export orders grew for a seventh month running in December and at the second fastest rate, after September, since the start of 2014.

Manufacturers in December reported increased levels of new work from the United States, Europe, China, Middle East, India and other Asian markets," said Archer, who added that softening demand in Britain is likely to increasingly weigh down on import volumes.

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