UK Confidence Rises but Biggest Fear is US Economic Slowdown
UK importers’ and exporters’ confidence rose in August but the business outlook remains challenging, according to Travelex Global Business Payments. With confidence in an export-led recovery falling for the second consecutive month, the international payments provider issued a rallying call to UK manufacturers, calling on them to drive exports through “quality, innovation and differentiation”.
While confidence had risen seven points in August, Travelex said that fears of a US slowdown had dented importers’ and exporters’ expectations, with the Expectations Index recording its slowest growth since March, moving only two points to 105 in August. It underlines importers’ and exporters’ increasing concerns that sluggish global growth may suffocate demand for UK exports.
“There are some signs that the UK economy is recovering as data has recently been much better than expected,” said David Sear, global managing director at Travelex Global Business Payments. “Private consumption is increasing, government borrowing is falling and we’re importing less and exporting more. Unfortunately, if the US recovery does falter, it will affect UK exporters and our third quarter GDP figure. In this kind of climate, the onus is on UK manufacturing to drive our exports forward.”
The index will add to the mounting concern that the US slowdown may impact the UK’s export led recovery. As the US is a critical export market for the UK, it is likely that ongoing uncertainty in the US will be felt keenly in the UK and elsewhere in the global financial markets.
Of the importers and exporters interviewed, Travelex Global Business Payments found that 82% of them cited the health of the global economy as the biggest threat to their business’ development. Sear said: “New reports suggest that the global recovery is losing traction and this has clearly been playing on the minds of importers and exporters.”