UK trade deficit narrows considerably more than forecast

The UK’s total trade deficit in the second quarter of the year was £24.9bn, down six per cent from the first quarter of 2013, while trading activity increased significantly.

Imports rose to £103.3bn, the highest level since the three months to November 2011, and exports hit a record high fo £78.4bn. For countries outside the EU, exports of goods rose 7.5 per cent to over £40bn for the first time ever.

And the goods surplus with the US reached a record high as exports rose 3.3 per cent and imports fell 1.3 per cent. In contrast, the trade deficit with Germany increased to a record high, with exports falling 9.0 per cent compared to the previous year (mainly oil) and imports increasing 7.0 per cent over the same period (primarily pharmaceuticals and medicines).

Looking at June alone, the trade deficit decreased significantly to £1.548bn from £2.435bn. Expectations had been for a less drastic narrowing to £2.350bn.

The goods trade deficit also narrowed considerably to £8.082bn from £8.491bn the month before. Analysts had expected to see it widen slightly to £8.5bn. This was complemented by a 6.5 per cent increase in the service surplus to £6.5bn.

The trade deficit for non-EU trade decreased to £2.646bn from 4.093bn. Expectations had been for a fall to £3.800bn.