Britain's goods trade deficit hit a new high in November, undermining hopes that a rebalancing of the economy towards manufacturing and exports generally has begun to have fundamental effects.
Over the past three years the value of the pound has fallen by around 20 per cent against a range of international currencies, providing a boost for many businesses, but official statistics revealed yesterday that imports are continuing to grow more quickly than exports, particularly from countries outside the European Union – and especially from China.
A 10.3 per cent rise in exports over the three months to the end of November was overshadowed by a 13.5 per cent increase in imports, the Office for National Statistics said yesterday. The total goods deficit rose to £8.7bn, more than ever before, though the total trade deficit, with services taken into account too, was a more modest £4bn in November.
Vicky Redwood, senior UK economist at Capital Economics, said the November goods data had been skewed by a sharp rise in the oil price, which pushed up imports. But she warned: "The big picture is that the external sector needs to start playing a much bigger role in the recovery if the economy is to weather the fiscal squeeze now under way."