UK trade deficit hits record high as exports sink

 
Julian Harris
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BRITAIN’S trade deficit hit a record high in June, as exports tumbled during a month in which economic activity was disturbed by the Queen’s Jubilee.

The trade gap widened to £4.3bn in June, up from £2.7bn in May, as shipments of goods collapsed by 8.4 per cent.

Exports of services rose 1.7 per cent, failing to offset the slump in goods shipments.

Services produced a surplus of £5.8bn, while the trade in goods registered £10.1bn shortfall.

The Office for National Statistics (ONS) said June was affected by May’s bank holiday being moved back a month, coupled with events surrounding the Queen’s Jubilee.

For the second quarter, exports fell 3.3 per cent from their level a quarter earlier (excluding oil and erratic items).

Imports slipped by 0.5 per cent in the second quarter, suggesting that economic troubles are taking their toll on trade.

“Looking through the monthly volatility, it is clear that the Eurozone woes are having a major impact on our exporters,” said Mark Gregory, Ernst & Young’s chief economist.

“Export volumes to EU countries fell by 3.7 per cent in the three months to June, in contrast to a fall of 2.4 per cent to non-EU countries.”

Exports to France crashed by £269m in June, by £233m to the Netherlands, and by over £100m to both Italy and Spain. Bucking the trend, exports to Germany rose by £109m. “In the short-term the outlook for exports remains fragile,” Gregory added.