Featured Posts

Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

Read more

Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

Read more

Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

Read more

Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

Read more

UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

Read more

UK trade deficit hits new record

Category : Business

Britain’s trade deficit ballooned to its highest level since modern records began following a sharp drop in exports

Britain’s trade deficit ballooned to its highest level since modern records began in June following a sharp drop in exports – with particularly weak demand from countries outside the crisis-ridden eurozone.

Hopes of a rebalancing of the economy towards overseas sales were dented with the release of official figures showing the gap between imports and exports widened from £2.7bn to £4.4bn.

Although Britain’s export performance has been hampered by the prolonged crisis in the eurozone, the 4.6% drop in the value of overseas sales in June was largely the result of weaker demand from countries outside the European Union. Exports to the US, where the economy has been slowing down in recent months, fell sharply.

The Office for National Statistics said the UK trade deficit was the largest since comparable records began in 1997 and were made up of a £10.1bn in trade in goods, offset by a £5.8bn surplus in services.

City analysts said the figures were poor even when allowing for the disruption to business caused by the extra bank holiday in June to celebrate the Queen’s Diamond Jubilee.

They noted that the trade gap for the second quarter – a better guide to the underlying trend than one month’s figures – increased from £7.8bn to £11.2bn, enough to wipe 1% off economic growth.

Chris Willliamson, economist at Markit, said: “The fall could perhaps be in part blamed on the disruption to shipments caused by extra holidays for the Queen’s Jubilee, but there is clearly an underlying trend of worrying weakness in overseas demand.” He added that the fall in exports in the second quarter was the biggest since 2006.

Vicky Redwood, UK analyst at Capital Economics, said that if the extra bank holiday had affected shipments through UK ports, it should have affected imports – down only 0.7% in June – as severely as exports. “And previous extra bank holidays have not had that big an impact. In June 2002, the month of the Golden Jubilee, the deficit widened by only £0.4bn.”

Post a comment