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article imageStrong pound threatens growth of Britain's export market

By Dawn Denmar     Sep 16, 2013 in Business
The strengthened pound may be good news, rising to a nine-month high against the dollar for week ending Sept. 13. However, it could prove a hindrance to Britain's economic recovery and exports-led improvements.
A weak pound has assisted Britain's economic recovery by indirectly fuelling massive export increases to a record high of over £78 billion for the second quarter of 2013. These high exports have been hailed as showing a move towards exports and away from consumption, however a strong pound may threaten this balance.
Sterling rose to $1.5874 against the dollar, seven percent above July’s lows of $1.49 and a high that has not been reached since last January.
The Federation of Small Businesses (FSB) indicates today more than 25 percent of British businesses are expecting increases in exports for the third quarter of this year. FSB Chairman, John Allan, has warned though that added costs of British exports could stifle this growth.
Of course, a strong pound is not all doom as British importers should be able to bring goods into the country at cheaper rates and boost their UK trade in that way.
Certainly, today's report from the FSB shows the small business sector is remarkably buoyant at this moment with 54.2 percent of businesses expressing ambitions for growth in the third quarter.
More about strong pound, Economic recovery, British export market
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