BRITAIN’S trade deficit narrowed slightly in November but the small improvement was not enough to claw back the sharp deterioration seen over the preceding months and provided little evidence that a weak sterling was having any beneficial effect.
Figures from the Office for National Statistics, published yesterday, revealed that the trade deficit in goods fell to £6.8bn from £7bn entirely as a result of imports falling by £200m, while export volumes remained flat.
Although there was little visible contribution from sterling, analysts remained hopeful that a weaker currency would start to have a positive effect on the UK’s trade position.
Andrew Pilkington, economist at the Centre for Economic and Business Research (CEBR) said: “The weaker sterling value will cause the UK economy to rebalance further away from reliance on external debt; we will see a structurally lower trade deficit than prior to 2009.”
Across the Atlantic, there was disappointment as the US trade deficit hit a 10-month high in November as imports outpaced exports. Net trade is now likely to only have a neutral effect on fourth quarter growth.