| Abstract: | Sterling has now appreciated by over 25% since the second half of 1996. A key issue affecting the UK economy is the extent to which this will reduce growth this year and in 1999. When can we expect to see the net trade position deteriorate and to what extent? In this article, Paul Robson and James Nixon argue that business survey evidence implies that the current strength of Sterling is likely to lead to falling manufacturing exports over the course of this year. This combined with increased import penetration should be sufficient to cool the economy and remove the need for a further interest rate rise. |
