The scale of the task facing ministers and the UK's exporters was underlined yesterday in the latest trade figures.
The Office for National Statistics reported that the UK deficit on visible trade in goods was at its widest since records began in 1980 and thus, probably, its widest in the UK's history as an industrialised nation.
Despite a 20 per cent slump in sterling since 2007, the UK imported £9.2bn worth of goods more than it sold abroad. The better position in invisibles – especially financial services – pulled the deficit down to £4.8bn. The total deficit in 2010 widened to £97.4bn against £82.4bn the previous year. In December, excluding oil and exceptional items, export volumes fell by 1.3 per cent on the month while the volume of imports increased by 1.4 per cent.
In stark contrast, the German government's latest export data revealed that, despite a stall in growth caused by the bad weather in December, the European Union's largest exporter continues to outstrip all its rivals – so much so that a rebalancing may be needed.
In fact, the December figures were below market expectations, with exports in value termsrising 0.5 per cent on the month, and imports declining by 2.3 per cent. In volume terms over the quarter, German exports are only 0.2 per cent above their third-quarter levels.
Over the whole of 2010,however, exports were up by 18.5 per cent, a performance underlined by the strong trading figures posted this week by BMW, Audi and VW.
Over the past year German exporters have benefited from the low euro, improved competitiveness and renewed demand from China for capital and consumer goods.Reuse content