• UK goods and services trade deficit worsens to £4.1bn in May, April deficit revised up to £3.1bn

Commenting on the trade figures for May, published today by the ONS. David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

  “These figures were disappointing and worse than expected, showing a widening in the trade deficit. While the volume of exports rose in May, there was a surge in imports and the deficit consequently increased.    

“The data supports one of the key messages of our recent economic survey, that exports are rising but not at the pace we need for a rebalancing of the UK economy. Unless net exports become the main engine of Britain’s economic recovery, it will be difficult to sustain growth. The government’s deficit cuts are continuing to put pressure on domestic demand. As well as stronger exports, we also need to see UK firms replacing imports in the domestic market by buying more of our own goods and services. 

“The government must do much more to support British businesses, especially small and mid-sized firms, in key areas such as trade finance, promotion and insurance. While low interest rates and a competitive pound will help exporting companies, more must be done to deregulate the labour market and to ensure UK businesses can compete on equitable terms.”