By Steve Pateman
Head of UK Corporate and Commercial Banking
Amidst all the focus on the EU and the International Monetary Fund funding package for Ireland, and the concerns over the sovereign debt crisis spreading to other peripheral and even mainstream European economies, one story that perhaps didn't get the air time it warranted was that of the growth in the UK economy in the third quarter. Whilst growth was shy of the 1.2% seen in quarter two, growth of 0.8% was ahead of many expectations, as is the likely final outcome for 2010, ahead of what the Office for Budget Responsibility now see as a more difficult couple of years, as the economy adjusts to a new level of public spending.
A closer look at the figures reveals a few interesting trends. Consumer spending has yet to pick up, as it has in other economies, which is hardly surprising given fears over cuts in the public sector. And investment rates are still pretty sluggish, reflecting many business’s uncertainty over what the short- and medium-term holds, with many business owners content to sit tight and wait for the New Year before committing to any new investment.
So what fuelled that healthy growth? Largely it was foreign trade, specifically UK firms selling well overseas. The weak Pound helps of course, but the story doesn’t end there. UK exporters are leading the way in driving the recovery, with manufacturers, so long seen as yesterday’s men, in the vanguard of that charge.
And that is reflected in the conversations we’re having at Santander. Many of our customers — or indeed prospects — are looking overseas to capitalise on the growth in emerging markets. They are working harder — and smarter — and we’re only too pleased to stand beside them in a supporting role. Whether that is providing growth capital, or trade finance services to manage the risks of overseas trade, Santander’s strength and reach comes into its own for businesses driven by export. Help with exporting is a vital and often overlooked part of what a bank can do to help its customers develop new markets, and when they successfully do so, we take as much pride in their success as they do.
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