British export growth: Sterling devaluation delivers outperformance of big EU economies


Exports from the UK have been boosted by weaker sterling (Source: Getty)

British exporters continued to outperform their counterparts in the biggest European economies in the second quarter of this year as the weaker pound boosts UK businesses selling abroad, according to an index tracking export growth.

UK export growth has outpaced French and German equivalents for five consecutive quarters, according to an index compiled by accountants BDO.

Export growth has remained well above the long-term trend in the year since the referendum, the index shows, based on a mix of surveys and economic data.

Read more: British exporters bounce back as sterling sweet spot takes hold

The index measured 104.4 for the second quarter of 2017, above the 100 level which indicates growth at long-term trend levels.

However, that represented a slowdown from the first quarter, when the index peaked at 109.4.

Meanwhile the equivalent measure for Germany reached 103.3 and in France export growth was below long-term levels at 99.2.

British exporters have been boosted by the devaluation of sterling in the year since the EU referendum, as products priced in sterling have become cheaper when bought in foreign currencies.

Bank of England deputy governor Ben Broadbent has previously described the current situation as a “sweet spot” for exporters, with cheaper prices and no change in trading arrangements with the EU.

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Exports across the world have also been supported by a strengthening global economy which has boosted trade.

Peter Hemington, a partner at BDO, said: “UK exporters have significantly outperformed their EU counterparts since the referendum last year. They were quick to realise the opportunities the currency devaluation offered in the global marketplace.

He added: “However, the future trading conditions for UK businesses are uncertain. There is a new government in place, little clarity on the Brexit deal and a services sector that is grinding to a halt. UK exporting performance could quickly be overtaken by Germany and France.”