Germany predicts drop in exports to Britain due to EU exit

BERLIN – German exports to Britain are forecast to fall both this year and in 2017 due to the country’s vote to leave the European Union, a business group said Thursday.

The Association of German Chambers of Commerce and Industry is forecasting that exports from Germany, Europe’s biggest economy, will slip 1 per cent this year and 5 per cent in 2017.

It had previously predicted a 5 per cent increase in exports to Britain this year but revised its assessment because of the fall in the British pound, which makes German exports priced in euros more expensive in Britain, as well as the prospect of weakening investment.

Britain was the no. 3 destination last year for German exports, taking goods worth 89.3 billion euros ($98.8 billion).

The group said most businesses expect bilateral trade to remain constant during the upcoming negotiations on a British exit but many predict it to fall once Britain has left the EU, with extra bureaucracy and legal differences a concern.

Meanwhile, Britain’s Treasury chief and senior figures in five international banks pledged to work together to ease concerns about the future of the huge financial sector based in Britain.

George Osborne met with top officials from Goldman Sachs, Standard Chartered, Morgan Stanley, JP Morgan and Bank of America Merrill Lynch.

In a joint statement Thursday, the group stressed the need to join forces to “help London retain its position as the leading international financial centre.”

It was the second time this week that Osborne met with senior officials in the banking sector, hoping to ensure confidence in markets rattled by the June 23 vote to leave the 28-nation bloc. He met bank leaders from domestically based banks on Tuesday.