CBI industrial trends survey: British manufacturers are being hurt by the strong pound

Jessica Morris
Follow Jessica
The pound soared to a seven-year high against euro earlier this year (Source: Getty)

The strength of the pound and the Greek debt crisis continue to make life difficult for Britain's manufacturers.

The CBI's monthly industrial trends survey showed firms' order books fell to their lowest level since July 2013. The monthly gauge dropped to -10 this month, from -7 in June, although it remains above the historical average of -15.

Additionally, the number of firms who said they expect the volume of their export orders to increase fell to its lowest level since October 2011.

Read more: GDP data to show economy picked up in second quarter

The pound soared to a seven-year high against euro earlier this year making exports to the Euro area - the UK's biggest trading partner - more expensive. Britain's manufacturers also cited "political and economic conditions abroad" as a drag on orders.

"Manufacturers are continuing to feel the pressure from the stronger pound," Katja Hall, CBI deputy director-general, said.

"Greater buoyancy in exports remains a missing element from the UK’s recovery. Nevertheless, we’re encouraged by the government’s commitment to take steps to address this as part of its recently announced productivity plan."

Official data due out tomorrow is likely to show that the UK economy picked up in second quarter of this year, largely due to momentum in its large services sector. Economists expect economic growth to accelerate to 0.7 per cent, from an upwardly revised 0.4 per cent in the first quarter.

Related articles