- Importers and exporters adopt a âwait and seeâ approach in October
Over three quarters of the UKâs SME importers and exporters believe that fiscal tightening will successfully reduce the UKâs budget deficit, according to the latest Travelex Confidence Index (TCI) report. 76% believe that the Coalitionâs aggressive programme of spending cuts and tax hikes will work. Travelex said that their ringing endorsement of the Chancellorâs plans echoes that of rating agency Standard & Poorâs, who recently upgraded the UKâs economic outlook.
âMost of our business customers seem to be accepting that Government spending cuts are a ânecessary evil.â Whilst they might hurt business in the short-term, they are confident that the fiscal squeeze will reduce the deficit over the long-term, which is encouraging,â said David Sear, Global Managing Director at Travelex Global Business Payments.
Most importers and exporters adopted a âwait and seeâ approach in October, as the overall Confidence Index remained stable at 104. The index is now 7 points lower than it was in August. Faith in the current economic situation worsened; with confidence in the current economic environment falling 6% to 50%. Despite this, confidence in future international trading conditions edged up 2% to 62%.
âOverall, the latest index shows that UK importers and exporters seem to feel better about their longer term prospects than they do about their current situation. However, a recent string of positive UK data, such as stronger than expected third quarter growth and upbeat manufacturing activity, suggests sentiment among local importers and exporters may head higher over the near term,â commented David Sear.