ECB's Interest Rate Hike Lifts Exporters' Confidence

LONDON, May 11, 2011 /PRNewswire/ -- British exporters' confidence in the UK economy and trade opportunities has led to a three point increase in the Travelex Confidence Index, released today. The Index, which measures the sentiment of UK businesses trading internationally, has regained the high seen earlier this year and currently stands at 106 - five points higher than at the same time last year.

Since March, exporters' confidence in the UK's economy has increased by 25% to 55%. The European Central Bank's April interest rate rise and the consequent strengthening of the euro have combined to provide exporters with a competitive edge in the international marketplace and a renewed confidence in current and future trading opportunities.

Exporter confidence is also being propped up by the Government's stated objective to target an export-led economic recovery, with 58% of exporters believing its policies are effective compared to 32% in March, before the Budget announcement - a rise of 81%.

David Sear, Global Managing Director at Travelex Global Business Payments, said:

"April revealed a blossoming of confidence amongst UK exporters in trade conditions and the economy. Interest rates play a strong role in determining the strength of currencies and we can clearly see this playing out in April. The European Central Banks' hawkish approach has energised UK exporters, who are brimming with confidence with the resulting weakening of the pound.

"Although export trade is emerging as a strong contender to boost UK economic growth it is vulnerable to any change in the outlook for the eurozone interest rates. The ECB's less hawkish than expected stance on policy has already seen sterling recover from its lowest in more than a year as investors temper their outlook. If that theme gains traction in the coming weeks, it suggests a softer euro/sterling which might bode better for UK importer sentiment.

About Travelex Confidence Index

The Travelex Confidence Index (TCI), released monthly by Travelex Global Business Payments, provides a key indicator on international trade and economic conditions. Conducted by independent research company TNS-RI, the Travelex Confidence Index tracks the views and sentiments of the UK's SME importers and exporters across industry sectors and UK regions. The TCI is the only piece of research available that regularly tracks the UK's SME importers and exporters. Visit http://www.travelexbusiness.com//uk/confidence-index

    
    Media enquiries:

    Jessica Buttress 
    Travelex Global Business Payments 
    T: +44(0)20-8415-4204
    E: jessica.buttress@travelex.com