Gap in British trade widens to £640m

Click to follow
The Independent Online
Britain's trade gap widened to £640m in November, with both imports and exports rising sharply. Official figures published yesterday also revised up the estimate of October's shortfall to £553m. Even so, the figures were in line with City expecta tions, and helped take sterling slightly higher against the mark after its recent falls.

The deficit with EC countries rose to £205m in November from a revised £132m. Exports rose 1 per cent, with the biggest advance in sales to Belgium, the Netherlands and Luxembourg, followed by France and Germany. Imports from the EC rose 2.1 per cent, those from Germany by 6.1 per cent.

The trade deficit with non-EC countries was £435m, with no revision to the figure published earlier. The Central Statistical Office said the trend in Britain's total trade deficit was flat, after narrowing earlier in the year But it issued a cautious reminder that the shortfall in trade with non-EU countries rocketed dramatically to more than £1bn in December, partly because of a bulge in imports of works of art.

The value of exports climbed 3 per cent in November, taking them to £12.1bn. Exports of finished manufactures, the biggest climber, showed a £1bn increase in the three months to November, with the EC countries accounting for most of the rise.

The balance of export growth has shifted from non-EC countries to the EC. Shipments to North America and Asia have levelled off in recent months, while exports to European countries outside the EU has fallen.

Jonathan Loynes, an HSBC Markets economist, said: "A look at the trends reveals how important the recovery in Europe has become to our exporters." The volume of British exports to the EU was 22 per cent higher in the three months to November than in the same period a year earlier.

Imports rose 3.5 per cent in value, to £12.7bn, driven by the continuing strength of Britain's economic recovery. David Hillier, an economist at NatWest Markets, said: "Geographic proximity has meant that the EC has benefited most."

Imports of finished manufactures showed the biggest increase in the three months to November, with EC goods - mainly aircraft - accounting for all the rise. Trade in oil recovered in November after a fall the previous month. The surplus rose from £311m to £397m.

Kevin Darlington, UK economist at Hoare Govett, said: "The tone from now on is likely to be for a gradual slide further into deficit." He said the strong advance in Britain's export market share last year would not be repeated in 1995.

Comments