FXStreet (Delhi) – Research Team at Rabobank suggests that the recent strength of the UK Pound is acting as a curse for its manufacturing sector which is witnessing a substantial slowdown in terms of growth.
Key Quotes
“The pound sterling has been the third best performing G10 currency over a 12-month period, after the US dollar and the Swiss franc. Indeed, July’s manufacturing output fell by a monthly 0.8%, significantly weaker than the consensus of a 0.2% m-o-m rise, and pushing the annual rate down to -0.5%, which is the weakest rate since August 2013.”
“At the same time, trade data signalled that the drop in output wasn’t the only indication. Britain’s goods exporters suffered their worst month for almost five years, seeing the value of their merchandise decreasing by GBP 2.3bn to GBP 22.8bn in July.”
“The overall trade deficit widened to GBP 3.4bn. Admittedly, monthly figures are volatile and often undergo substantial revisions but it does still suggest that the strong pound is stunting the growth of British manufacturing.”
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