UK trade deficit in goods and services was £3.6bn in October, compared with a deficit of £2.5bn in September
Commenting on the trade figures for October 2012, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:“Although the trade deficit widened in October, this came after a significant improvement in September, and was not surprising given the erratic nature of the monthly figures. In the three months to October, the underlying volume of exports rose by 1.7% year on year, the same as that of imports. This supports our assessment that we are not yet seeing sufficient progress in rebalancing Britain’s economy towards net exports, and greater efforts must be made to achieve this. In its forecast, the Office for Budget Responsibility said it expected net trade to provide modest support to the economy over the next few years and the figures show a continuation of very welcome trends in the pattern of UK exports. In the three months to October, the volume of exports to countries outside the EU rose by 9.1%, while exports to the relatively stagnant EU fell by 5.2%, reflecting a greater focus on faster growing markets.
“The measures announced by the Chancellor in his Autumn Statement, which will provide greater support for exporting companies looking to break into new markets are very important. With austerity measures set to continue in the UK until at least 2018, it is clear that a sustainable recovery will have to rely significantly on diversifying and restructuring our economy towards net exports. British companies have massive untapped potential to expand, but they need the right backing to help compete and penetrate into new expanding markets. Further action from the government is needed in key areas such as trade promotion, finance, and insurance, and this must be part of a continued shift of priorities towards policies that will drive growth.”