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Strong pound and EU's woes hit exports

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The latest growth indicator from the CBI has suggested the UK's GDP grew by 0.7% in the first three months of the year, slightly above the 0.6% rate of expansion felt in the final quarter of 2014. However, there was a sharp fall in export orders for the manufacturing sector, and the CBI warned that the strong pound is harming an already foreign trade performance. The CBI's poll of 764 businesses did reveal hope of a better second quarter for 2015, and there was a positive balance of 18% overall between firms reporting performance up compared with those saying it was down. Other industries to see weaker growth included business and professional services such as accountancy, legal and marketing firms, whilst distribution businesses strengthened, as did consumer services and travel and leisure companies. Manufacturing and services do expect a pick-up ahead, with the overall balance of expectations for growth over the next three months at a positive 25%. The CBI says the greatest threat to the UK' s economy remains the eurozone, with uncertainty surrounding the Greek bailout causing particular pain. Official figures show the value of Britain's exports to the EU's 27 other states fell 3% to £11bn in January compared with the previous month, representing an 11.5% fall against January 2014.

 

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