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There had been hopes that the major fall in the pound in the wake of the Brexit vote in 2016 would boost manufacturing exports [Image: Reuters].

This Site said it last month – now the figures seem to have confirmed it: Greedy British business bosses has sunk a chance to improve our trade balance by selling more abroad.

Instead, it seems they have simply put up prices on the exports they already make.

I stated last month that the fall in sterling, after the EU referendum result in favour of Brexit, created an opportunity for UK exporters. It meant they could sell their products abroad more cheaply.

This would have made our exports more desirable, meaning (hopefully) that more foreign clients would buy them.

But exporters decided to push their prices up instead, making our products less desirable (although extorting more money from clients who were already contracted to buy from them).

Meanwhile, the depreciation in the value of the Pound meant imports became more expensive, squeezing UK citizens’ ability to buy and fuelling the recent rises in inflation.

The UK racked up a record trade in goods deficit in August, confirming the failure for the slump in sterling to help improve the UK’s trade balance.

The Office for National Statistics reported that the UK exported £28.1bn of goods in the month and imported £42.4bn, leaving a deficit of £14.2, the highest on record.

Over the three months to August exports fell 2.7 per cent while imports rose 3.9 per cent.

There had been hopes that the major fall in the pound in the wake of the Brexit vote in 2016 would boost manufacturing exports, helping to bring down the UK’s chronic trade in goods deficit.

But, so far, such hopes have been disappointed, as import values have risen in line with exports and UK firms seem not to have seized the opportunity of the more competitive exchange rate to increase their market share abroad.

Source: UK trade deficit at record high after pound slump fails to help export performance


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