The government will spectacularly miss its target to increase the value of UK exports to £1 trillion by the end of the decade, a new report has said, as the City of London looks set to continue punching above its weight on the global stage.
In a report launched today, Barclays said that the value of all goods and services the UK sells overseas will rise to just £633bn by 2020 — more than one-third off the government’s ambitious target.
“The UK will likely see slower growth in goods and services exports over the next 10 years, amid a global slowdown in trade,” Matt Tuck, head of global transaction banking at Barclays said.
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Last year, British companies sold £511bn worth of products abroad. The Eurozone was the UK’s largest trading partner as a bloc, though the United States was the single biggest export market, accounting for £88bn.
The US will hold on to the top spot until at least 2026, Barclays estimates, when it will account for £135bn, followed by Germany, whose share of exports will rise from £44bn to £66bn. The Netherlands, France and Ireland are also forecast to cling on to their positions in the top five.
Financial services will become the UK’s most important export industry at some point in the next few years, Barclays said. The City currently brings in £57bn to the UK economy, just behind the value of overseas sales of machinery and electrical goods, and foreign earnings for the UK’s banks, insurers and brokers will nearly double over the next ten years to £104bn.
“The size and comparative advantages of the City versus other financial and services centres will support growth. Business management and consulting, insurance and pensions ... will be UK’s fastest-growing export categories to 2026,” Barclays added.