Pound plunges as trade deficit widens by £2bn

Caitlin Morrison
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The UK trade deficit widened in the three months to May (Source: Getty)

The UK trade deficit widened from £6.9bn to £8.9bn in the three months to May 2017, official data has confirmed.

The pound dropped by 0.36 per cent against the dollar when the date was released, as it was also revealed production fell by 1.2 per cent in the same period. At the time of writing, sterling was down 0.42 per cent at $1.2916.

(Source: Bloomberg)

The Office for National Statistics (ONS) said the widened deficit reflects a higher rise in imports than the rise in exports of goods, in particular transport equipment (cars, aircraft and ships), oil and electrical machinery from non-EU countries, while a decrease in exports of services also contributed.

Import prices increased by 0.5 per cent in the three months to May 2017 whereas export prices remained flat, the ONS said.

However, excluding the impact of falling oil prices, import and export prices grew by one per cent and 0.5 per cent respectively.

The figures released today follow a pattern set in the first quarter of 2017, when the ONS also reported a widened trade deficit of £10.5bn.

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