UK trade deficit narrows by less than expected

Julian Harris
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AIN’S trade deficit narrowed less than expected in the penultimate month of last year, according to data released yesterday.

The figures, published by the Office for National Statistics (ONS), also showed a trend of UK companies’ exports heading beyond Europe’s borders.

“In volume terms exports of goods to the EU were 3.7 per cent lower in the three months to November than a year earlier,” the ONS said, referring to data that excludes oil and other erratic items.

“Exports to the rest of the world rose 6.8 per cent [in volume].”

Overall, the trading of services produced a surplus of £5.7bn – down from £5.8bn in October – which was weighed down by a £9.2bn deficit for visible goods, slightly down from October’s £9.5bn deficit.

The resultant total trade balance was a £3.5bn deficit, only slightly down from October’s level of £3.7bn.

“This brings the cumulative deficit for January to November of 2012 to £34.5bn, up from £22.2bn in the same months of 2011,” said Citi economist Michael Saunders. The UK remains “unable to generate export-led growth at a decent pace,” he added, with GDP likely to stay flat.