Oil cause of UK’s wider trade deficit
BRITAIN’S trade deficit widened in July to £2.44bn from £2.37bn in June, driven by a £100m increase in the deficit of oil, the Office for National Statistics said yesterday.
The official data showed that the UK’s deficit on trade in goods in July is provisionally estimated at £6.5bn, unchanged compared with June, while the trade surplus in services slipped back to an estimated £4bn from £4.1bn in June. Exports of traded goods excluding oil rose for a second successive month and at an increased rate of 4.5 per cent month-on-month in July.
Economists noted that the data showed underlying improvement in July but said there was little indication in the data that a better global economy and a weaker pound has done much to improve net exports.
However, Capital Economics’ Jonathan Loynes said that increasing exports are “being matched by rising imports, suggesting that any boost to the economy from net trade is likely to remain pretty small until overseas demand picks up more strongly”.