UK trade deficit narrows to £2.7 billion
The UK trade deficit has narrowed to £2.7 billion following a strong exports boost in May.
This represented a £1.4 billion decline in comparison to April, according to figures from the Office for National Statistics.
The seasonally adjusted export volume was 6.6% higher than the previous month, while imports also rose by 1%. The goods deficit was £8.4 billion, in comparison with £9.7 billion during the previous month, although services showed an unchanged surplus of £5.6 billion.
Commenting on the figures, David Kern, chief economist at the British Chamber of Commerce said: “Unusually, UK exports to non-EU countries were higher than exports to the EU.
Many now believe that the Government should do more to help exploit the huge potential of the UK manufacturing industry, which could help to further reduce the deficit.
While Richard Driver, an analyst for Caxton FX, was pleased by the figures but was concerned that they give a false impression of the state of the UK economy.
He said: “Moving the May Bank Holiday to June helped production but it goes without saying that the two extra Bank Holidays in June will see a dramatic decline when June’s figures are released.
“If you look at the effects of the Jubilee celebrations on production ten years ago, next month’s figures are likely to be very ugly indeed.
“Today’s figures do little to change the overall picture of the UK economy; we continue to anticipate another GDP contraction in Q2, while the forward-looking economic surveys suggest the chances of a bounce back into positive growth in Q3 remain limited.”
This was posted in Bdaily's Members' News section by Ruth Mitchell .