Imports push goods trade deficit to record high
Wednesday 12 January 2011
Imports of oil and aircraft pushed Britain's goods trade deficit to a record high in November, official figures showed today.
The trade in goods deficit - the difference between goods exported and imported - widened to £8.7 billion in November, from £8.6 billion in October, the Office for National Statistics said.
The overall trade deficit, which includes services as well as goods, widened from £4 billion to £4.1 billion.
Total goods imported rose by 3.4% to £32.4 billion in the month, while goods exported rose by 4.1% to £23.6 billion, the ONS said.
Economists said a widening trade deficit was a blow to hopes that net trade - when exports outstrip imports - could make a positive contribution to economic growth in the fourth quarter of the year.
After slashing public sector spending, the Government has pinned its hopes for economic recovery on the private sector, and net trade will be key to growth.
Latest survey evidence has offered hope for exports going forward. The export orders balance of the CBI's industrial trends survey jumped to a 15-year high in December, while the export orders index for the manufacturing purchasing managers' survey was at the second highest level in its 15-year history.
The escalating eurozone debt crisis - with nations including Ireland, Spain, Portugal and Italy all falling victim - has cast a shadow over export trade in the months ahead.
But Vicky Redwood, senior economist at Capital Economics, said the troubles in parts of the euro-zone seem to have had little adverse effect on the UK so far.
She said: "November's UK trade figures are not as bad as the widening in the headline deficits suggests. However, it is clear that net trade is giving at best a limited boost to the wider economic recovery.
"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."
She said excluding oil and erratics, such as aircraft, the trade in goods balance narrowed from £8 billion to £7.4 billion.
Ms Redwood went on: "Encouragingly, exports rose strongly in November. The continued upbeat tone of the forward-looking measures of export orders suggest that exports will keep growing strongly in the near-term."
Import prices for traded goods were unchanged at 1.7% in November, figures which are likely to soothe the Bank of England's concerns over inflation.
Cost of living has been stubbornly high in recent months - the Consumer Prices Index (CPI) rate of inflation was up 3.3% in November, up from 3.2% in October.
- 2 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 The most powerful passports in the world
- 5 Chinese student carries disabled friend to school every day for three years
Nepal earthquake: How you can help victims of the Kathmandu disaster
Nepal earthquake in pictures: Photos show devastation caused by 7.8 magnitude earthquake
Royal baby: Live updates as superbug closes ward at St Mary's Hospital in London where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: The photo of a tree that proves the Tories have an image problem
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...