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UK exporters wary despite Brexit windfall

Tuesday, May 09, 2017 - 01:48

Sheffield-based Gripple, cheering the plunge in sterling since last year's vote to leave the European Union, which means every overseas sale brings in more pounds than before. But as Lucy Fielder reports, like many British companies they see a bleak longer term outlook.

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A plunging pound has given UK manufacturers like Gripple, which makes building supplies, a windfall since the Brexit vote. UK exports have risen in value 15 percent over the past year, so you'd think they'd be rubbing their hands. But Reuters correspondent David Milliken, who headed to Sheffield to speak to Gripple and other manufacturers, found them striking a cautious note. (SOUNDBITE) (English) DAVID MILLIKEN, SENIOR UK ECONOMICS CORRESPONDENT, SAYING: "They've certainly found a boost in profits from the weaker currency, they sell in dollars and they sell in euros abroad so when they sell it back into pounds that means more money for them. But they've also found that their costs have gone up a lot. They use zinc as a key component for a lot of the fastening systems they make and that is something that has pretty much doubled in price over the last year or two." Britain's economy relies heavily on consumer spending, so there are high hopes a weak pound will boost exports and shift the balance. Pro-Brexit media and politicians talk of an export boom, sorely needed if prices keep rising and consumers start tightening their belts. But times are too uncertain for unbridled optimism, some manufacturers warn. (SOUNDBITE) (English) DAVID MILLIKEN, SENIOR UK ECONOMICS CORRESPONDENT, SAYING: "In the longer term, many people who support Brexit think that it will give Britain more freedom to negotiate trade agreements overseas which the European Union has been unable to do over the past few years. However, against that, many manufacturers also rely on tightly integrated supply chains across Europe and there are concerns that Brexit is going to make that harder, that they'll face delays at customs, they may also face higher tariffs." Reuters' findings suggest many exporters are wary of the sweet spot they find themselves in. They're holding back from any sudden spending spree, warning that theirs is a long game.

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UK exporters wary despite Brexit windfall

Tuesday, May 09, 2017 - 01:48