Non-eurozone exports boost trade-led recovery hopes

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The Independent Online

More evidence of the push by British exporters into new markets to avoid the woes of troubled European nations should emerge this week in official figures

Chancellor George Osborne and the Bank of England are pinning hopes on the UK trading its way out of trouble in the years ahead, as coalition spending cuts weigh on consumer spending and households clear debts.

The UK's overall goods deficit with the rest of the world is forecast to have edged higher from £7.53bn to £7.65bn in February's figures. But within the data experts are looking for signs of a continued drive for business outside Europe, which currently accounts for 40 per cent of the export market.

According to the Office for National Statistics, export volumes to the European Union have fallen more than 3 per cent since last August, when the crisis of confidence over debt-laden Italy and Spain was at its height.

But during the same period, exports to non-EU countries have jumped by more than 13 per cent. In cash terms, goods sales to China have risen 19 per cent – albeit from a smaller base – while exporters have also benefitted from a strengthening US economy as export sales hit £3.7bn.

The UK's trade deficit has also been flattered by falling imports – which bodes ill for the domestic economy.

But, the push outside Europe chimes with the latest signs from the Chartered Instutite of Purchasing & Supply, which reported manufacturers increasingly doing business with Africa and the Far East.

David Page, a senior economist with Lloyds Bank Corporate Markets, said: "The eurozone is currently 40 per cent of our exports but five years ago it was 50 per cent. If we continue at this pace it could be a down to a third of total exports. It raises hopes that the UK will be able to rebalance as long as we don't get a shock from Europe."