Oil cause of UK's wider trade deficit

BRITAIN&rsquo;S trade deficit widened in July to &pound;2.44bn from &pound;2.37bn in June, driven by a &pound;100m increase in the deficit of oil, the Office for National Statistics said yesterday.<br /><br />The official data showed that the UK&rsquo;s deficit on trade in goods in July is provisionally estimated at &pound;6.5bn, unchanged compared with June, while the trade surplus in services slipped back to an estimated &pound;4bn from &pound;4.1bn in June. Exports of traded goods excluding oil rose for a second successive month and at an increased rate of 4.5 per cent month-on-month in July.<br /><br />Economists noted that the data showed underlying improvement in July but said there was little indication in the data that a better global economy and a weaker pound has done much to improve net exports. <br /><br />However, Capital Economics&rsquo; Jonathan Loynes said that increasing exports are &ldquo;being matched by rising imports, suggesting that any boost to the economy from net trade is likely to remain pretty small until overseas demand picks up more strongly&rdquo;. <br />