It has been the dog that didn't bark during this recovery. Despite a 20 per cent appreciation of the pound during the past 18 months, so far there has been no sign that the loss of competitiveness has damaged Britain's export performance.
Gordon Brown, Chancellor of the Exchequer, yesterday played down the risk to exports in. In an interview the Chancellor said: "There has been consistent growth in volumes by exporters and there will be considerable growth next year."
The Bank of England has similarly pointed out that trade has held up much better than anybody had expected.
But new figures brought the first signs of damage to export performance. The deficit on trade in goods doubled from pounds 616m in August to pounds 1.3bn in September.
The Office for National Statistics (ONS) also published for the first time monthly figures for trade in services. This was in surplus by pounds 700m in September, little changed from the previous month.
The total current account therefore shifted from a small surplus of pounds 64m in August to a pounds 552m shortfall in September.
The headline deterioration was exaggerated by erratic moves, but underlying growth in export volumes fell 0.6 per cent during the month, and slowed markedly between the second and third quarters. Export growth has slipped from 3.3 per cent in April-June to 0.6 per cent in the three months to September.
Perhaps the most telling indication of a darker outlook ahead came from figures for export prices.
After falling steadily since early 1996, they rose for the second month running. Although still 5.5 per cent lower than a year earlier they were up 0.4 per cent in September.Reuse content