UK exports up, but deficit widens

The UK’s trade deficit was slightly up in October, increasing to £3.9bn from £3.8bn in September. However, export levels for recent months were revised upwards, improving the balance of trade. September’s trade deficit was revised down from a previous estimate of £4.6bn, due to improved data on exports. “The widening of the deficit was largely due to stronger growth in imports, which is not necessarily a bad thing,” said Andrew Goodwin, senior economist at the Ernst and Young Item Club. Exports increased by £1.5bn between September and October, yet imports also jumped, by £1.1bn. In the three months to October, exports to China increased by 38.6 per cent on the previous year, as firms looked towards emerging economies in the east. And services exports are on the rise, increasing by the fourth month in a row. “The trade-led recovery certainly appears to be on track,” said Goodwin.