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Trade deficit narrowed, ONS figures reveal

UK exports rose in the last quarter, according to figures released today by the Office for National Statistics (ONS).

Imports meanwhile fell, meaning that the overall trade deficit in July narrowed to £1.5 bn, down from £4.3 in June.

The deficit on goods was £7.1 bn, offset by a surplus of £5.6 bn in services.

Exports were up 0.9 percent in the three-month period until the end of July, compared to the previous three months, while imports were down 0.8 percent. These figures exclude “erratic” items, such as oil.

The overall deficit for the same period was £8 bn, down £2.5 bn on the previous quarter.

Exports of erratic items also increased in July: when these are included in the data, the total increase in exports is 8.5 percent on June.

Exports to the EU were up 7.7 percent and up 11 percent to the rest of the world in July. Meanwhile, imports rose marginally, by 1.1 percent, from the EU, and fell 5.3 percent from the rest of the world.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “The large decline in the July trade deficit more than reversed the setbacks recorded in June. We know that British exporters are facing major challenges due to problems in the eurozone and the global economy as a whole, so progress towards rebalancing will be slow and painful.

“However, the latest trade figures show encouraging progress, and reinforce our hope that the UK economy will return to positive growth in the third quarter of 2012. UK exports to non-EU countries were slightly higher than exports to the EU in the last three months, which shows a shift in the traditional pattern where exports to the EU are usually much stronger.

“We have always stressed that exporting companies have huge untapped potential to expand, but need the right support to help them compete and break into new markets.”

This was posted in Bdaily's Members' News section by Robert Cooper .