Why have UK exports underperformed over the last decade?

摘要

The UK's loss of global exports share has continued during the past decade, with the biggest losses concentrated in goods exports. Our quantitative analysis shows that the geographical focus of UK exports towards advanced, slow-growing, economies, has been the single most important factor explaining the underperformance of UK exports. A better geographical focus could have lifted UK exports significantly compared to actual outturns, with a large impact on overall economic activity. Worsening competitiveness has acted as an additional drag, although this has been largely reversed in recent years as sterling has depreciated. Finally, we find that UK goods exports have underperformed, beside the effects of geographical mix and competitiveness. We attribute this to the UK not being well enough placed in the goods most in demand, in particularly machinery equipment.