IMPORTS went up faster than exports in July, according to figures released yesterday by the Office for National Statistics.
Exports went up by two per cent on June’s figures. and imports increased by 3.8 per cent. That leaves the trade deficit in goods unchanged at £8.9bn and the surplus in services at £4.5bn.
Falls in the pound had an impact, with the price of imports rising by 1.3 per cent and export prices falling by 0.7 per cent.
When compared with last year, the figures show greater increases in trade. Both exports and imports from May to July increased by 8.1 per cent relative to the same period in 2010.
The expansion is not fast enough to keep the economy growing, however, according to some analysts.
“Domestic demand is under pressure because of the deficit reduction programme,” said David Kern, chief economist at the British Chamber of Commerce (BCC). “That programme is unavoidable and we support it, but it also means the UK economy must export to grow.”
That means the small and medium sized enterprises (SMEs) need more support in terms of trade finance, information and promotion, the BCC argues.
“UK firms are at a disadvantage compared with competitors abroad. They need help to understand and enter foreign markets, and the playing field is just not level,” Kern explained.