Election win for Trump ‘will hit UK exporters’
A WIN for Donald Trump in Tuesday’s US election could hit British exporters by sending the pound surging, economists have warned.
Trump has been a vocal critic of trade deals done by the US and there are fears that his election could herald a new era of protectionism.
Consultancy Capital Economics said: ‘A potential lurch towards protectionism in the US could hit the UK economy hard.
‘Given that total exports account for about 30 per cent of UK GDP, this means that goods and services exported to the US equate to around 6 per cent of the overall UK economy.’
The consultancy predicted that a win for Trump could be bad for the dollar, which would result in the pound strengthening in the short term.
However, it added that if Trump could persuade Congress to push through tax cuts, then the boost to US demand could help UK exporters.
Meanwhile, the British economy is continuing to gather momentum following the vote to leave the European Union, the CBI is due to announce today.
The CBI’s growth indicator – a survey of 764 businesses – climbed to +8 per cent from +3 per cent in September.
CBI chief economist Rain Newton-Smith said: ‘Private sector growth is picking up and it’s encouraging that firms expect activity to continue at a healthy pace in the next three months.
‘Manufacturing exports are riding high on the back of weaker sterling and consumers are continuing to spend on the high street.’
Figures set to be released on Tuesday by the British Retail Consortium are expected to confirm that spending remains buoyant.