October 17, 2016

UK Export Prices Prices Balancing The Pound’s Drop

   October 17, 2016

UK Export Prices Prices Balancing The Pound’s Drop

UK_Export_Prices_price_TMMChart.png

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Editor’s remarks:
Export Prices correspond to the rate of change in the price of goods and services sold to foreign buyers and are therefore intrinsically linked to exchange rates. The pound has fallen sharply and erratically since the Brexit vote, as worries persist that leaving the single market could cost the UK £66bn in tax revenues. This has reduced the relative cost of British exports, making them more attractive to foreign buyers. The problem with this is that Britain imports far more than it exports with a current account deficit of £18bn in August 2016. If the pound continues to devalue, which it is projected to, imports will become increasingly expensive to the average British consumer, and therefore the standard of living. With the British labour force comprised of numerous ex-pats, this could severely damage future British productivity. It would also offset any apparent competitivity in exports, and ensure that the average British consumer is no better off than before, in fact, they will be worse.
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