“The trade figures for August show an improvement in the overall trade deficit, and are better than expected. A revision of previous figures means that the trade deficit was smaller than previously estimated. Excluding all erratic items, exports have increased more strongly than imports over the last month, and also on a three-monthly basis. It is encouraging that, even in a difficult international environment, Britain is able to strengthen its trading position.
“The figures provide a welcome contrast to the steady flow of negative news we have recently. However we cannot underestimate the challenges ahead for exporters, particularly in the face of the serious problems facing the Eurozone, which remains our major trading partner. As the fiscal austerity plan dampens domestic demand, net exports have to be the main engine of Britain’s economic recovery.
“This means that the government must support a national export drive. Unless we accelerate the pace of export growth and we gain market share from imports in the domestic market, it will be difficult to sustain UK growth. The government must strengthen its backing for SME exporters in key areas such as trade finance, insurance and promotion. While a competitive pound and low interest rates can help our exporters, further efforts are needed to ensure that our businesses can compete equitably with foreign exporters. On their part, Britain’s exporters must make every effort to diversify their sales towards fast growing economies such as India, China and Brazil.”