Belfast Telegraph

UK Website Of The Year

Home News UK

Boost for Chancellor ahead of Autumn Statement as trade deficit narrows

Published 06/11/2015

Britain's trade deficit has narrowed
Britain's trade deficit has narrowed

Britain's trade deficit narrowed to an estimated £1.4 billion in September while manufacturing achieved its largest monthly increase since April 2014, official figures show.

The data will provide a timely boost to Chancellor George Osborne, who is set to deliver his Autumn Statement speech later this month, although the longer-term data paints a less positive picture.

According to initial estimates from the Office for National Statistics (ONS), Britain's deficit on trade in goods and services was £1.6 billion lower than in August 2015.

But while the figures improved in the short term, Britain's third quarter trade deficit of £8.5 billion was still £5.1 billion wider than in the second quarter, the report noted.

Looking at manufacturing, the estimated monthly rise of 0.8% was the largest seen for 19 months, according to the ONS.

The strong uplift comes after numerous turbulent months for the sector, meaning manufacturing is still 0.4% lower in the third quarter when compared to the previous three months.

Lee Hopley, chief economist at manufacturers' organisation EEF, said the figures still provided reason for optimism.

"While manufacturing contracted in the last quarter there are signs that some parts of industry were at least mounting a comeback after a summer lull," she said.

"Together with the sharp rebound in October's PMI, we may yet see some more positive data readings in the remainder of 2015 but the risks from weaker activity in emerging markets are likely to present some headwinds for manufacturers into next year."

Overall, total production output in Britain increased by 0.2% between the second and third quarters, which is slightly lower than the 0.3% growth predicted in last month's GDP figures.

Commenting on the trade deficit figures, British Chambers of Commerce chief economist David Kern warned that September's marked improvement should not distract from the wider problems facing the economy.

"While it is good news that the trade deficit improved in September, we know that monthly figures can be erratic, and the more representative quarterly figures show a significant worsening between the second and third quarters," he said.

"This is disappointing because it confirms our assessment that the improvement recorded in Q2 was only temporary.

"In addition to the unsustainably large trade deficit, the total current account deficit is even larger as a result of a large deficit in net income from foreign investment.

"Against this background we clearly need a national strategy that will help our exporters to achieve their export ambitions."

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting?

Read More

From Belfast Telegraph