BPA and Currency UK Publish Report on Decline in the Value of the Pound
The British Ports Association and Currency UK have today published a report that considers the trajectory of the Pound in the wake of the upcoming Brexit deadline and the potential impact on various aspects of the British economy, relating to ports.
The publication plots Sterling against the US Dollar and the Euro and explores three aspects on the economy; exports, energy and infrastructure.
- Impact on Exports: Report finds that it’s perhaps an oversimplification to say that a weak pound will lead to a boost in exports, and this may also have a detrimental impact on fishing the fishing industry.
- Impact on Freight: Possible exacerbation of HGV driver shortage as weaker pound means it is less lucrative for foreign drivers to work in the UK.
- Impact on the Energy Industry: As oil is traded in US $, it will be less profitable to trade when the Pound is weaker in relation to the Dollar
- Impact on Infrastructure: Investments in infrastructure are potentially more likely with a lower value of the Pound, though fluctuations in value and economic uncertainty are not necessarily attractive to foreign investors.
The report concludes by noting that despite a recurring theme of uncertainty, one thing likely to change as a result of currency fluctuations is the complex purchasing patterns of UK manufacturers and businesses, as well as international business streams and foreign investment in the UK.
Commenting, Richard Ballantyne, Chief Executive, at the British Ports Association said:
“It is pivotal that we understand what impact Brexit will have on UK trade, ports and currency; which is why we must explore contingencies of what may happen to the value of the British Pound, and the subsequent impact on trade and investment in ports. The British Pound has fluctuated significantly since the 2016 EU referendum, so it is important to consider the impact of this uncertainty, and whether UK ports will be better or worse off as a result; a vital consideration when we take account of the £9.7 billion of value that the ports sector brings to the wider UK economy.”
Alex Coates, Director of Operations, at Currency UK said:
“How Britain will exit the EU remains clouded by uncertainty. This means that fluctuations in the value of Pound on the international currency market continue to be a recurring theme. This can represent real opportunities for international investors and currency traders but can also create unpredictability for those in the shipping, freight and ports business, which facilitate 95% of the UK’s physical trade.”
- The British Ports Association represents the interests of over 100 port members, covering more than 350 ports, terminal operators and port facilities.
- The UK ports industry plays a key role in the country’s economy as 95% of the UK’s international trade – imports and exports – is carried through British ports.
- UK ports also handle more than 60 million international and domestic passenger journeys each year.
- The UK port industry is the second largest in Europe, handling around 500 million tonnes of freight each year.
- UK ports directly employ around 101,000 people.
- The British Ports Association recently produced a video which highlights the importance of ports to the UK’s economy. It can be viewed by clicking here.