Whilst confidence had risen 7 points in August, Travelex said that fears of a U.S. slowdown had dented importersâ and exportersâ expectations, with the Expectations Index recording its slowest growth since March, moving only 2 points to 105 in August. It underlines importersâ and exportersâ increasing concerns that sluggish global growth may suffocate demand for UK exports.
âThere are some signs that the UK economy is recovering as data has recently been much better than expected,â comments David Sear, Global Managing Director at Travelex Global Business Payments. âPrivate consumption is increasing, government borrowing is falling and weâre exporting more and importing less. Unfortunately, if the U.S. recovery does falter, it will affect UK exporters and our third quarter GDP figure. In this kind of climate, the onus is on UK manufacturing to drive our exports forward.â
The index will add to the mounting concern that the U.S. slowdown may impact the UKâs export led recovery. As the U.S. is a critical export market for the UK, it is likely that ongoing uncertainty in the U.S. will be felt keenly in the UK and elsewhere in the global financial markets.
Of the importers and exporters interviewed, Travelex Global Business Payments found that 82% of them cited the health of the global economy as the biggest threat to their businessâ development. Sear says, âNew reports suggest that the global recovery is losing traction and this has clearly been playing on the minds of importers and exporters.â