Britain Trade Deficit Widened from Two Year Low
Total goods exports to non-EU countries rose to a record high, helped by car sales to the United States, Russia and China. Total oil exports also hit a record peak due to higher oil prices, though Britain's deficit in trade in oil widened. The Office for National Statistics said the goods trade deficit grew to £8.77bn in February from an upwardly revised £7.88bn in January. Economists had forecast a gap of £7.7bn.The goods trade deficit with non-EU countries widened to £5.02bn in February from 3.72bn in January and against forecasts for a gap of £3.85bn. The figures show UK trade deficit has widened from the broad range that stood in the last couple of months, and that's a slight disappointment.
Recent economic data indicated that Britain may have just skirted recession, returning to moderate growth in the first three months of 2012.The euro zone debt crisis has stoked fears that Britain's exporters and the country's feeble economic recovery could be hit hard. However, exports to countries using the euro ticked up in February. Market expectations had been for a larger deficit of £7.9 billion in January.
A survey this week showed British manufacturers' export sales and orders expanded at their slowest pace since late 2009. The overall decline in exports was driven by lower exports of silver, intermediate goods and consumer goods excluding cars to non-EU countries. The ONS said that chemicals imports, including medical products, rose 12 percent on the month to 4.5 billion pounds. Overall goods imports rose faster than exports as Britain sucked in oil from Nigeria, Saudi Arabia and Russia as well as chemical products from Germany, the Netherlands and the United States. Apply with loans.co.uk @ www.doortodoorsteploan.co.uk/ and get quick funds.
DAVID PAGE, LLOYDS states the numbers are very disappointing .They continue to show trade rebalancing in the UK is a long way off. The volatility has been caused to some extent by a reversal of export growth to non-EU economies but what is particularly concerning is the recent flare of euro area concern - is the continuing deterioration of exports to the euro area, and this will act as a large drag on rebalancing. Britain's economic recovery has been severely hampered by the long-running sovereign euro zone debt crisis. Although the UK trade deficit widened in January, the big picture is that the external sector is still holding up quite well, given the euro zone debt crisis said analyst Vicky Redwood, at the Capital Economics consultancy. But with the euro zone economy sliding into recession, we doubt that this will last.
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