Demand for UK goods 'supported by currency exchange rate'

The currency exchange rate for sterling is playing a role in supporting the UK's industry, it has been claimed.

According to the Confederation of British Industry (CBI), demand for UK-made goods has risen due to a weak sterling.

Consequently, industrial production has increased and this has resulted in an upward revision to the predicted economic growth.

The CBI revised its predictions for growth in the UK economy this year from one per cent in March, to 1.3 per cent.

Richard Lambert, director-general of the CBI, commented: "Although the risks to the economic outlook have increased, our view is that the UK's tentative recovery will be sustained.

"However, economic growth will be weak and we do not expect a return to pre-recession GDP levels until 2012."

Mr Lambert added that the "main driver of economic growth" will be the private sector because government spending is expected to be reduced following the Budget announcement on June 22nd.

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Posted by Sarah Pitton