The UK posted its smallest trade deficit in seven months in April as bumper export performance proved the latest sign that Brexit uncertainty is failing to knock the UK economy.
British firms and consumers bought £3.3bn more from abroad than they sold overseas in April, according to figures released by the Office for National Statistics (ONS) this morning, down from a deficit of £3.5bn in March and its lowest level since September 2015.
In a string of record-highs, the total value of UK exports jumped by 5.3 per cent to £44.9bn during the month - its fastest growth since February 2010. That was led higher by UK manufacturers, who roared back to life in April, increasing the value of the goods they sold abroad by 9.1 per cent.
The ONS also said the UK recorded its highest ever goods deficit with the EU of £23.8bn in the three months to April.
The figures come just one day after bumper manufacturing data forced analysts to review their expectations of a sharp growth slowdown in the second quarter of the economy due to referendum jitters.
The manufacturers' organisation, EEF, welcomed the figures. Zach Witton, deputy chief economist said: "Today’s data provides some encouragement on the UK’s export performance, backing up recent signs that Europe’s economic recovery is gaining momentum, while global growth may be starting to turn a corner. It’s also possible that the recent weakness of Sterling may be providing some support for exporters."
|Factor||Value||Best performance since|
|Overall trade deficit||£3.3bn||September 2015|
|Total exports growth (monthly)||5.3 per cent||February 2010|
|Goods exports growth (monthly)||9.1 per cent||January 2003|
|Goods exports growth (quarterly)||6.4 per cent||January 2011|
|Non-EU goods exports (monthly)||£14bn (up 10 per cent)||Highest on record|
Howard Archer of IHS Global said the figures were a "welcome and much-needed improved on the trade front as the UK total trade deficit narrowed. [It] lifts hopes that UK exporters will increasingly be helped by the overall marked weakening of the pound over the coming months".
Some economists warned, however, not to get too carried away with one month's statistics.
Michael Martins at the Institute of Directors said that while "the cheaper pound may have helped exports of goods like chemicals and machinery ... the flip-side is that if the pound stays low it means higher prices for importers.
"It is also worth pointing out that these types of export goods are the most likely to be subject to tariffs in the event of Britain leaving the EU, so any positive effect may be short-lived."
"Despite the narrowing in the UK’s trade deficit for April, net trade is still not providing much support to the economy," said Scott Bowman at Capital Economics.