UK trade deficit widens in June but balance improves in Q2

AUG 7, 20155:16 PM

[LONDON] Britain's trade deficit with the rest of the world widened slightly less than expected in June, as trade likely made a positive contribution to economic growth in the second quarter.

The Office for National Statistics said on Friday that Britain's trade deficit in goods alone widened to 9.184 billion pounds from 8.419 billion pounds, compared with economists'forecasts for it to widen to 9.3 billion pounds.

The total trade deficit widened to 1.601 billion pounds in June from 885 million pounds in May.

For the second quarter as a whole, the goods trade deficit narrowed to 27.440 billion pounds from 30.419 billion pounds in the first quarter, marking it the smallest goods trade deficit since the second quarter of 2013.

Business surveys have shown British exporters struggling in the face of weak demand in crisis-stricken eurozone and a rise in sterling which has made British goods more expensive abroad.

But the ONS said the quarterly trade balance would make a positive contribution to economic growth in the second quarter, although it could not yet quantify this.

The total trade deficit in the second quarter fell to 4.182 billion pounds from 7.496 billion pounds, which was the smallest deficit since the second quarter of 2011.

Britain's trade data is volatile on a monthly basis, and the ONS said that in the three months to June as a whole, exports in goods were up 6.6 per cent - the biggest quarterly rise since the first three months of 2006 - while imports were up 0.5 per cent.

This compares with export growth of 0.3 per cent in the first quarter of the year, and a 2.1 per cent increase in imports.

REUTERS