Commenting on the trade figures for December 2010 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“These figures are disappointing and worse than expected. The trade deficit increased when most commentators were expecting an improvement, although bad weather conditions might have affected these figures. While we shouldn’t give too much weight to one month’s numbers, it is disappointing to see that exports fell during the month, while imports rose. So far, it is clear that Britain’s trading position is not improving.
“Although exports have grown at various points over the past year, the pace of recovery is not strong enough. The impressive recovery in manufacturing output has not yet been translated into a major improvement in Britain’s international trading position. This is worrying, since the Government’s deficit-cutting programme will inevitably dampen domestic demand. A substantial increase in net exports will be a key component in any sustainable UK recovery.“Starting with its trade white paper, the Government must ensure that Britain’s exporters can break into new markets abroad. It is up to the state to remove competitive disadvantages British companies face in key areas such as trade finance, export insurance and trade promotion. UK SMEs in particular need all the help they can get to ensure they can move into fast-growing emerging markets such as China, India and Brazil.”