UK’S trade deficit rose in January as the weak EU economies bought fewer British goods and services, official figures showed yesterday.
However, chancellor George Osborne (pictured right) is closer to his goal of rebalancing the economy towards foreign sales as exports to non-EU countries rose sharply, the figures from the Office for National Statistics revealed.
Goods imports rose 2.6 per cent in the month from £34.4bn to £32.75bn, outstripping the two per cent rise in exports, from £25.56bn to £26.06bn, increasing the deficit from £7.18bn to £7.53bn.
Meanwhile services exports and imports both fell by 2.7 per cent, with imports down to £9.45bn and exports down to £15.24bn, leaving a surplus of £5.78bn.
The overall trade deficit increased from £1.2bn in December to £1.8bn in January, though that still represents an improvement from November’s £3.2bn.
By region, goods exports to the EU fell 0.3 per cent to £13.14bn while imports from the countries rose 1.4 per cent to £17bn, increasing the deficit to £3.85bn.
Meanwhile goods exports to non-EU countries jumped 4.4 per cent to £12.92bn, faster than the 3.9 per cent rise in imports, which rose to £16.6bn to leave a deficit of £3.68bn.
Car and oil exports were particularly important, rising £0.5bn and £0.3bn respectively.
“Despite the monthly deterioration and discouraging EU trade data, the deficit has been declining overall – importantly, the UK is now on a more favourable trading position with emerging Asia,” said Daniel Solomon from the Centre for Economics and Business Research.
“This trend is likely to continue as the effects of the latest round of quantitative easing feed into the economy, pushing down real interest rates and putting further downward pressure on the pound.”