- Christina Hamilton, managing director of Western Union Business Solutions
Britain's economy is now one of the fastest growing developed economies in the world. Earlier, it was believed that the growth is mostly led by a heating housing markets and a steep decline in the savings rate. The latest quarterly research from Western Union Business Solutions found out that the nation's small and medium-sized companies believe the domestic trader is single-handedly boosting economic recovery. According to a research almost 40% of companies expect trade with European countries to recover during the next 12 months, after activity with all other major markets declined sharply in the final quarter of 2013. While stronger demand and overall economic improvement in Europe helped to improve the trade balance, British companies are concerned about the strength of the Pound, as further appreciation will have serious effect on the businesses. During the last eight years, the Sterling has climbed 8%, while hawkish comments from the Bank of England and Mark Carney's unconvincing comments only fuelled speculation about the upcoming rate hike. Another finding is the fact that only 57% of the small and medium sized companies bought goods and services from Europe, compared with 59% a quarter earlier and 74% at the beginning of 2013. It means that British companies are willing to do business with domestic companies, rather than operate with their neighbours. It is a worrying sign, as economy is highly dependent on its local customers, while recovery cannot be considered as balanced until the ONS reports constantly stronger exports.
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