The banking giant HSBC has launched a £4bn fund to help small businesses boost exports as its latest forecasts showed the UK's trade recovery lagging well behind global rivals.
The bank is making the cash available to smaller firms with a turnover of up to £25m in the coming weeks to fund expansion in key emerging markets such as China and India.
The launch of the fund came as the bank's economists predicted that UK trade would grow 59 per cent over the next 15 years, well below the 86 per cent expansion in global trade forecast during the same period.
Trade activity will actually shrink by an average of 0.43 per cent a year during the next five years as the country attempts to prevent contagion from the eurozone's debt woes as well as recover from its own economic crisis. In contrast world trade is expected to grow at an annual rate of 3.78 per cent.
The bank said: "2012 is set to be a challenging year for the UK as despite the priority placed on increasing trade-generated growth, the close trade ties of the UK with countries within the eurozone means that progress is slower than expected." The poor trade performance in prospect deals a blow to the Bank of England's hopes of rebalancing the economy towards exports. But despite the short-term woes ahead, stronger sectors such as bio-pharmaceuticals, oil and gas and cars will shake off the wider malaise, according to HSBC.
The UK's car industry is set to boost exports to China by 15 per cent on average during the next five years, "suggesting that the UK is reducing its dependency on European markets for exports in this sector".
HSBC's global head of commercial banking, Alan Keir, said: "Trading internationally will be critical for not only the British companies who want to remain competitive in the future, but it is also critical to the UK economy."