Times of Oman
Sep 01, 2015 LAST UPDATED AT 03:08 PM GMT
UK trade deficit rises to five-month high in June
August 8, 2014 | 12:00 AM
The country’s total goods trade deficit grew to 9.4 billion pounds ($15.8 billion) in June, its highest level since January, from 9.2 billion pounds in May. Photo: Bloomberg
 
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London: Sagging exports pushed Britain's trade deficit to a five-month high in June, suggesting a more balanced economic recovery still looks a way off, although the construction industry recovered from a dip in May.

Exports of British goods to countries outside the European Union fell to their lowest level since September 2011, coinciding with the pound hitting a near six-year high against the dollar.

The country's total goods trade deficit grew to 9.4 billion pounds ($15.8 billion) in June, its highest level since January, from 9.2 billion pounds in May, official data showed on Friday. Economists had forecast a gap of 8.8 billion pounds.

The data dampened hopes that exports will soon make a greater contribution to Britain's consumption-led economic recovery, but separate construction data and a recruitment survey still pointed to strong domestic demand.

"The (trade) problem is largely out of the UK's hands," said Martin Beck, senior economic advisor to the EY ITEM Club, who pointed to weak growth in the euro zone — Britain's biggest export market.

Foreseeable future
"This is likely to remain the case for the foreseeable future. Sterling rose further in July while the euro zone economy looks set for little or no growth in Q2."

By contrast, Britain's economy grew 0.8 per cent in the second quarter, according to an early estimate.
The Bank of England — which will release updated economic forecasts next Wednesday — expects that pace of growth to slow slightly later this year.

The pound hit an eight-week low against the dollar after Friday's data, pressured mostly by news that the United States had authorised air strikes against militants in Iraq.

Including Britain's surplus in trade in services, the overall trade deficit rose to 2.5 billion pounds from 2.4 billion pounds, also the biggest since January, the Office for National Statistics (ONS) said.

Exports of goods decreased in June by 0.4 billion pounds, reflecting falls in oil and manufactured goods. Imports also declined, but only by 0.1 billion pounds.


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