UK trade deficit expected despite stronger exports

THE UK is undergoing a “two speed” recovery, with exporting companies set to take advantage of greater demand abroad than at home, a survey revealed today.

“Confidence in international trade is robust as exporters thrive on a global rebound but confidence in the current UK economic climate is at a record low as consumer demand remains sluggish,” the report by Travelex said.

However, despite a weak pound and increasing demand in foreign markets, the UK is still expected to report a trade deficit for January, when the official figures are released today.

And 45 per cent of trading companies are concerned that this month’s budget will negatively affect their business.

“My first concern is the hike in National Insurance,” one manufacturer told Travelex.

Nonetheless, trade with emerging Asian markets is on the rise, the survey revealed, despite declines in trade with the US and Europe.

And almost half – 47 per cent – of small to medium-sized British firms trading internationally have reported an increase in their exports, a separate report by Bibby Financial Services revealed.