Economics weekly by Lloyds TSB

The sharp fall in sterling over the past three years and the nascent signs of recovery in the global economy provide an opportunity for growth that the UK cannot afford to miss.

Recovery in UK exports holds key to future growth

The sharp fall in sterling over the past three years and the nascent signs of recovery in the global economy provide an opportunity for growth that the UK cannot afford to miss. With the household and corporate sectors weighed down by high levels of indebtedness, and the public sector about to embark on a substantial fiscal squeeze, the prospect of a meaningful recovery in domestic demand over the coming years is, we believe, limited. Instead, to achieve a reasonably strong and sustained rate of growth means it is not only desirable, but essential, that the UK rebalances away from debt-driven domestic demand towards net exports. The competitive boost provided by the fall in sterling, and the steady recovery in global demand, provide this opportunity.

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