Revival in German and UK trade

BRITAIN&rsquo;S trade deficit narrowed in May to &pound;2.2bn from &pound;3bn the previous month, according to official data published yesterday.<br /><br />Figures from the Office for National Statistics (ONS) showed that the UK&rsquo;s deficit on trade in goods in May was an estimated &pound;6.3bn, while trade in services remained at &pound;4.1bn.<br /><br />In Germany, exports recovered slightly in May, increasing by 0.3 per cent on the previous month, while imports decreased by 2.1 per cent. Consequently, the trade surplus of one of the world&rsquo;s leading exporters widened to &euro;9.6bn from &euro;9.4bn.<br /><br />ING&rsquo;s Carsten Brzeski, said: &ldquo;All hard, real economic data was up in May &ndash; retail sales, industrial production, new orders and now exports. It is far too early to declare the return of Germany&rsquo;s growth engine but one thing is for sure: there is life in the old dog yet.&rdquo;<br /><br />A recovery in German trade adds weight to the European Central Bank&rsquo;s (ECB) more positive the economic outlook yesterday. In its monthly report, the ECB said it still expects positive quarterly growth rates by mid-2010.<br /><br />But it now expects current low or negative inflation rates to be short-lived with price stabilisation in the medium-term. It had previously forecast prices to remain dampened due to sluggish demand.