UK Trade Deficit Rises Following 2 Year Low

13 March 2012 15:00 - Florence Fullalove

    



UK Trade Deficit Rises Following 2 Year Low

Official data from the Office for National Statistics (ONS) has showed that Britain’s trade deficit widened in January but strong exports to non-European Union countries rose to the highest levels since records started. Exports of good to non- EU countries totalled £12.9 and this increase was driven by exports of cars to mainly to the US, China and Russia. Oil exports also rose £293 million in January to a total value of £9.3 billion and the increase in oil prices is likely to be the force behind this sharp rise.

The ONS said the U.K’s goods trade deficit grew to £7.5 billion in January from a deficit of £7.3 billion in December of last year. David Kern, chief economist at the British Chambers of Commerce said, “The increase in the trade deficit seen in January is not surprising following the vast improvement seen in December.” He also added, “Exports are growing more quickly than imports, and it is reassuring that the economy is gradually rebalancing. These figures support our belief that the economy returned to positive growth in the first quarter of the year, and a new recession will be avoided.”

The Bank of England and the government are hoping that exports growth will help drive Britain’s economic recovery particularly as consumer spending is under increasing pressure thanks to slow wage increases, high inflation and the government’s austerity programme. However, the threat of the European debt crisis still lingers in the air and recent economic data in Britain has been mixed. Having said this, according to the Organisation for Economic Co-operation and Development (OECD), the British economy is showing signs of improvement. 

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Related Links :
Office for National Statistics - Statistical Releases
British Chambers of Commerce - Supporting British Business
Bank of England - The Central Bank of the UK
OECD - For research and data
Economic Calendar - For scheduled economic events
Latest News - For regular news updates

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