Moretti Associates UK Trade Gap Widens

Online, February 2, 2011 (Newswire.com) - "Moretti Associates" , the European-based investment house, apparently still believes the UK government's hope that exports can make a sizeable contribution to GDP growth are on shaky foundations.

Tony Black who heads up corporate trading at "Moretti Associates" said, "Weakening the pound hasn't worked as well as they'd initially hoped because there's always someone else who can weaken theirs to a greater degree. Japan and the US are actively pursuing the same policies whilst countries like Germany are having it done for them by the continuing European debt crisis."

The austerity measures announced by the UK government have partially reassured investors of its intention to shrink the deficit but this has also served to strengthen the pound against the dollar and other currencies, making UK exports more expensive and imports cheaper.

Even though exports in October rose to the highest levels since May 2006, imports also rose significantly and subsequently negated any benefit.

A "Moretti Associates" analyst suggested that efforts to reduce the UK's trade deficit would face additional headwinds in the shape of fallout from the eurozone debt crisis and the as-yet-unclear ramifications of US quantitative easing and the recently announced tax cut deal which is expected to further weaken the greenback.