Disclaimer: This is a non-economist’s take on economic issues. I could be totally wrong about the economics.
According to xe.com, one pound is worth USD 1.48812 today at 20:37. Not long ago, it was almost USD 2 for a pound. We hear that cheaper currency is a piece of good news for the Great British exporters. But as newspapers, radio and television programmes remind the UK population, there is a lot less manufacturing nowadays compared to the last century: what does Britain export?
There is no large-scale manufacturing in Britain, such as ship-building, that I can think of and I’m a little pressed to name a British company operating in Britain that manufactures goods that are exported and recognized throughout the world. Of course there is Rolls Royce the engine maker, but other than that? Finland has Nokia as a recognized brand, Germany is known for its cars, Japan and Korea export electronic goods. You might live in Britain, but you carry around your Nokia mobile phone, drive around a VW, have a Samsung television on your wall and play Nintendo Wii with it. The products may be all made in China but the companies are still located in the countries mentioned above. I suppose Britain still has its arms manufacturers. But other than weapons?
I turned to National Statistics Online and HM Revenue and Customs: UK trade info to look at the figures. In September 2008, the trade deficit stood at GBP 3.9 billion. This figure was the total for trade in goods and services: the news got worse when I looked at the figure for the trade deficit in goods — it was GBP 7.5 billion. Boo! The UK had a trade surplus of GBP 3.6 billion in services. Britain is a post-industrial, service-sector based economy. Hooray! The Q2 figures show that the industry with the largest surplus (GBP 13,164 million) was "financial". Q2 was before the financial storms of September and October. Oh dear.
Anyway, what does Britain export? The top three goods Britain exported in Q2, according to the data available at HM Revenue and Customs: UK trade info, were (1) Petroleum, petroleum products & related materials – GBP 8,254 million; (2) Road vehicles (including air cushion vehicles) – GBP 6,170 million; (3) Medicinal & pharmaceutical products – GBP 4,215 million. Though when you turn to the top three imported goods, then it doesn’t look that great. Britain imported (1) Petroleum, petroleum products & related materials – GBP 9,690 million; (2) Road vehicles (including air cushion vehicles) – GBP 9,499 million; (3) Miscellaneous manufactured articles – GBP 4,579 million.
So, in short, Britain doesn’t really export much, and life is going to become more expensive.