Understanding recent developments in UK external trade
The sterling effective exchange rate depreciated by around 25% between mid-2007 and early 2009. That has encouraged a shift towards UK exports and away from imports, contributing to a significant narrowing in the United Kingdom’s real trade deficit. This article explains these developments in more detail. It shows that the depreciation has induced considerable switching of expenditure by overseas companies and households towards UK goods exports, and by UK residents away from travel services imports. But financial services exports appear to have suffered from the financial crisis. And there seems to have been less of a response to the exchange rate depreciation in other services exports and non-travel imports. Looking ahead, both the level of sterling and developments in the rest of the world are likely to be crucial to the United Kingdom’s trade performance.
Volume (Year): 51 (2011)
Issue (Month): 4 ()
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nigel Pain, 2004.
"International Production Relocation and Exports of Services,"
NIESR Discussion Papers
237, National Institute of Economic and Social Research.
- Nigel Pain & Desirée van Welsum, 2004. "International Production Relocation and Exports of Services," OECD Economic Studies, OECD Publishing, vol. 2004(1), pages 67-94.
- Ray Barrell & Amanda Choy & Simon Kirby, 2006. "Globalisation and UK Trade," National Institute Economic Review, National Institute of Economic and Social Research, vol. 195(1), pages 63-67, January.
- Nigel Pain & Annabelle Mourougane & Franck Sédillot & Laurence Le Fouler, 2005. "The New OECD International Trade Model," OECD Economics Department Working Papers 440, OECD Publishing.
- Alan V. Deardorff & Saul H. Hymans & Robert M Stern & Chong Xiang, 2000. "Forecasting U.S. Trade in Services," Working Papers 467, Research Seminar in International Economics, University of Michigan.
- Leland Crane & Meredith A. Crowley & Saad Quayyum, 2007. "Understanding the evolution of trade deficits: trade elasticities of industrialized countries," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 2-17.
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