LONDON—The U.K. government will announce Wednesday new export trade-
finance initiatives aimed at helping small businesses gain access to
overseas markets as part of its strategy to boost export growth.

Prime Minister David Cameron, whose coalition government has placed
exports and investment at the center of its economic-recovery plan
since coming into office in May, said strong trade policies and
outcomes were of the utmost importance for the U.K.'s economy, and
that the government would do all it can to bolster trade.

"We need to ensure business, especially our SMEs [small and medium-
sized enterprises], have all the tools they need to flourish, that we
strengthen and improve our relationship with trade partners around the
world, that we fight protectionism and ensure poor countries can
benefit fully from free and fair trade," he said, speaking ahead of
the launch of the export strategy.

These tools are expected to include new initiatives for trade finance,
which facilitates exports by providing credit insurance to companies
selling their goods and services overseas.

A person familiar with the matter said Wednesday's announcements won't
narrow down a set of financial products or detail new funds to back
them, but will focus on setting a broader range of companies that will
be allowed to get access to them.

Until now, export trade finance has been geared toward large companies
and big projects in industries such as heavy engineering and
aerospace. This remit is now being broadened to include much smaller
companies, the person said.

With domestic demand for goods and services likely to remain
suppressed due to the public-sector spending cuts and tax increases,
the government is banking on an increase in the goods and services it
sells to other countries.

However, to date the U.K.'s export performance has disappointed,
despite the pound losing some 24% of its value against the dollar
since late 2007. That has led to calls from the opposition Labour
Party for a broader growth strategy.

As part of the strategy to boost exports, Wednesday's announcement is
also expected to shift the focus of the government's business
promotion agency, U.K. Trade and Investment, to emerging markets,
which are seen as fertile ground for exporters. The person familiar
with the matter said the announcement will place a big emphasis on the
U.K.'s championing of open markets and trade deals, which takes up the
baton from previous U.K. governments, which have for many decades beat
the drum for open markets.

Wednesday will also be one of the first official events for the U.K's
new trade minister, former HSBC Holdings PLC Chairman Stephen Green.

Separately, a leading U.K. business organization, the Confederation of
British Industry, said that the Bank of England will need to raise
interest rates later this year to head off the threat of inflation and
prevent the need for bigger rate rises later on.

The CBI's view is an unusual endorsement of policy-tightening from
business, which tends to favor lower borrowing costs to boost demand.

The BOE's Monetary Policy Committee meets Wednesday and Thursday to
decide on interest rates and its asset-purchase program. Few
economists think it will act this month but many are predicting
tighter policy later this year, possibly as early as May, to bring
down inflation.

CBI chief economic adviser Ian McCafferty, presenting the group's
quarterly economic forecasts, said rising prices are a major concern
for businesses. "I think our members are concerned about underlying
inflation pressures and hence would want the Bank of England to
achieve its [inflation] target," he said.

If the BOE can control domestically caused inflation, he said, "I
think we will find that interest rates will have to rise far less
sharply over the course of the next two to three years...than would
otherwise have been the case if inflation expectations become
unhinged."

The BOE faces a balancing act familiar to central banks in most
developed economies. The recovery from the effects of the financial
crisis is not yet assured, but strong demand for energy and food from
fast-growing developing nations is pushing up prices. Central bankers
are therefore torn between continuing to provide a stimulus to growth,
and responding to inflation rates that are rising above their comfort
zones.

But the BOE faces the most extreme form of that dilemma, with the
economy having contracted in the final three months of last year, at
the same time as the inflation rate rose even further above its 2%
target, to 3.7% in December.

Given the scale of its inflation problem, many investors expect the
BOE to be the first major central bank to raise its key interest rate,
possibly as early as May. But the policy arguments are now so finely
balanced that few economists rule out a surprise move Thursday.

On Monday, a report from the Ernst & Young ITEM Club consultancy said
overseas sales to key emerging economies would led to a major boost to
the U.K. economy in coming years. It predicts exports of Britain's
goods and service to Brazil, India, China and Russia, which currently
represent just 5% of U.K. overseas sales, will rise to 11.7% a year
through to 2020.