Carnival over as Brazil Feels Economic Crisis
Britain's economy has little to fear in the short term from the crisis in Brazil, which is only its 32nd-largest trading partner.
And Brazil's woes are unlikely to have an immediate impact on the Bank of England's approach to monetary policy.
Analysts believe Britain, like other G7 countries, is better placed to counter any knock-on effects in other emerging markets after changes put in place since the various global crises of last year.
"It is one thing if emerging markets everywhere are collapsing around you. But if it is just Brazil, then there is less of an impact," CIBC World Markets economist Mr David Coleman said.
"I can not imagine Bank of England governor Eddie George is going to set policy according to Brazil."
Economist Mr Matthew Clements, of Prebon-Yamane, said while the situation in Brazil could complicate things later in the year it would not necessarily make the BoE's Monetary Policy Committee more likely to cut rates. "Domestic considerations are going t o far outweigh speculation about what Brazil might do to the economy."
Britain sends just over pounds 1 billion of goods - 0.5 per cent of total annual exports - to Brazil, the Office for National Statistics said. In return, Britain's imports from Brazil are worth just under pounds 1 billion.
In the latest crisis, global stock markets tumbled initially but later proved more resilient than pessimists had suggested.
But it will underline the continuing need for world financial reform.
Britain took the lead last September in pushing for an overhaul of the international financial system which led to a G7 commitment to greater effort.
Mr Tony Blair said yesterday that the Brazil situation reinforced the case for more transparency to encourage sound economic policies. "These have been troubled times for the global economy and for some individual emerging market countries," said Mr Blai r.
"In these circumstances, vigilance is essential as well as an on-going and far greater commitment to reforms of the international financial system, based on transparency, codes of conduct and co-operation between regulators which can help to entrench sou nd policies. …