Economic growth attributed to low exchange rate

The low sterling exchange rate has been praised for contributing to the economic growth of Britain.

Low exchange rates have been held partly responsible for the higher than expected contraction in the UK economy following the release of the third quarter economic figures from the Office for National Statistics (ONS) yesterday.

Economist, David Owen from Jefferies, told the Daily Telegraph that the fall in the pound had "encourage domestic customers to buy British goods, rather than those from overseas".

He said: "If it hadn't been for the fall in the currency, GDP would have been down a lot more than six per cent: it might have contracted eight per cent or perhaps more."

Figures from the ONS show that the account deficit for the third quarter of 2009 was £4.7 billion, half that expected by analysts.

The UK economy contracted by 0.2 per cent in the same quarter, trumping earlier estimates of 0.3 per cent.

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Posted by Sarah Pitton