UK growth will be fuelled by emerging global middle class

Britain will be rescued by the growing market of middle-class consumers from the developing world in the next decade as demand for exports of hi-tech products and financial services is driven up due to growing affluence.

Exports are predicted to be the saviour of the British economy is pulled back to sustainability by the re-orientation to markets in Brazil, Russia, India and China. At present, just 5pc of UK exports are going to the emerging “BRIC” nations, which is less than to Ireland alone.

The positive forecast comes just days after UK manufacturing activity was revealed to have expanded in January at the fastest pace in 19 years. The figures from last week show that the production from British factories at the beginning of 2011 accelerated at the fastest pace since the Markit/CIPS purchasing managers’ index began.

The Government is betting all its chips on the recovery in the economy coming from the exports and business investment sectors. They now have a lot of work to do in facilitating the re-orientation of exports towards nascent markets and breaking down regulatory barriers to help improve relationships with the countries and their governments.

Government policy is also expected to be focused on supporting competitiveness through improving skill levels and providing incentives to invest, which in turn would help to close the productivity gap with Germany.

During the recession exports dropped by 1.8pc in both 2008 and 2009, however, it seems that they are already making marked improvements and are expected to be back up to strength mid-year.

Commentators are saying that the UK needs to be looking to Germany as a model for competitiveness and learn from their long-term export schemes which have so far been significantly more successful than similar attempts in Britain.