MercoPress. South Atlantic News Agency

UK minister arrives in Brazil to ramp trade with generous export financing

Chancellor of the Exchequer Osborne is scheduled to meet Mantega and Tombini

At the start of a three day trade trip to Brazil, the Chancellor of the Exchequer George Osborne announced the next stage in the UK government’s fundamental overhaul of finance for exporters which should move the UK to the top of the global league for export support.

 Despite the Latin American giant of some 200 million being the world's seventh-largest economy, Brazil was the destination of just one percent of British exports last year -- leaving Britain trailing behind EU neighbors Germany, France and Italy.

"For decades, we have not been exporting enough -- not just to Brazil, but to all the fastest growing markets in the world, so I am confronting that historic weakness head-on," Osborne told business leaders in Rio do Janeiro.

Osborne announced that following discussions with the Bank of England there would be a significant increase in loans availability and a cut in the cost of private-sector lending for exporters, which confirms a doubling in size of the UKEF (UK Export Finance) direct publicly-financed lending facility for exporters to £3 billion and the cutting of its interest rates by a third

Taken together these measures for private and public export finance will help achieve the government’s aim to give the UK the most competitive export finance in Europe and put it on a par with the United States.

In 2012 to 2013 UK Export Finance provided loan guarantees worth over £2 billion in total. Today’s new announcement could help reduce the cost of private-sector export finance loans by 5 to 10 basis points.

The Chancellor of the Exchequer said Britain aims to ensure a lasting infrastructure investment legacy from the partnership Britain struck with Brazil when it handed on the Olympic torch from London to Rio in 2012.

Osborne is to meet on Tuesday with his Brazilian counterpart Guido Mantega and Central Bank of Brazil governor, Alexandre Tombini and also visit the Sao Paulo stock exchange.

The British finance minister said he was doubling government export lending and cutting the interest rates on that lending by a third.

"I am clear: Britain will no longer have some of the least competitive export finance in Europe. We are going to have the most competitive export finance in Europe," Osborne predicted, saying his measures would mean "billions of extra lending" for British exporters and also cheaper lending.

With Brazil in the global sporting spotlight, British firms last year netted a billion pounds worth of contracts in Brazil. But Osborne said London is now offering support for a further 1.5 billion pounds of deals despite weak consumer demand.

Over the last decade the Brazilian Economy has tripled in size, and now ranks as the seventh largest in the World. UK trade with Brazil has increased by over fifty per cent in the last four years but still accounts for less than one per cent of total UK exports.