· UK goods and services trade deficit worsens in June to £4.5bn from £4.0bn in May; deficit on trade in goods worsens to £8.9bn from £8.5bn
Commenting on the trade figures for June, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“Disappointing trade figures for the second month in a row reveal a widening trade deficit and a decline in the volume of exports, both month-on-month, and quarter-on-quarter. When looking longer-term, there is a healthy growth in exports, up 5.2% in the second quarter of 2011, in comparison to the same quarter a year ago.
“UK exporters face turmoil in the international financial markets and acute economic problems facing our major trading partners in the Eurozone. As the government’s deficit-cutting programme continues to dampen domestic demand, net exports will have to be the main engine of Britain’s economic recovery. Unless we succeed in accelerating the pace at which exports rise it will be difficult to sustain growth. “The government must do much more to support UK businesses, particularly small- and medium-sized businesses in key areas such as trade finance and promotion. Although a competitive exchange rate and low interest rates will help exporting companies, more must be done to deregulate the labour market and ensure that UK businesses can compete on equitable terms.”