Surprise import surge worsens trade deficit

BRITAIN'S trade with other countries unexpectedly slipped deeper into the red last month, as imports grew more quickly than exports, despite the depressed state of consumer and business spending.

The Treasury hailed the rise in imports as evidence that the economy was starting to turn round. But longer-term trends show that import growth has been slowing over the past year, while exports have been subdued by weakness in the US and German economies.

The deficit on trade in 'visible' goods was pounds 1.13bn in July, compared with pounds 947m in the previous month, according to the Central Statistical Office. The City had expected the trade gap to narrow to about pounds 900m.

The deterioration was exacerbated by trade in oil - which showed its smallest surplus since August 1990 at pounds 19m - but flattered by unusually depressed aircraft imports. Excluding oil and erratic items, which also include precious stones and ships, the trade gap widened by pounds 172m to pounds 1.36bn. This was the second largest underlying trade deficit since August 1990.

Including a pounds 200m projection for the surplus in trade on 'invisible' goods, such as insurance and tourism, the estimated current account deficit grew by pounds 187m to pounds 934m. The cumulative current account deficit for the first seven months of the year is estimated at pounds 6.4bn, compared with the Treasury's Budget forecast of pounds 6.5bn for the year as a whole.

Exports were virtually unchanged on the month at pounds 8.8bn, while imports rose by pounds 226m to pounds 9.95bn. The volume of exports, excluding oil and erratics, was 2 per cent higher in July than a month earlier, while import volume rose by 2.4 per cent in the same period. Comparing the three months to July with the previous three months shows both import and export volumes increasing by 1 per cent, although import growth has been slowing in recent months.

The volume of imports of capital, intermediate and consumer goods were all higher in July than in the previous month.

'The three-month comparison suggests there has been no great post-election surge in import spending, which would have begun to feed through by now', said Ian Shepherdson, economist at Midland Montagu. 'Export growth has been depressed, but helped marginally by the weaker pound.'

Economic weakness in Britain's European markets has been reflected in slower growth in exports to the European Community. Exports to Eastern Europe and the former Soviet Union are rising quickly, but from a low base.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
i100
Arts and Entertainment
tvChristmas special reviewed
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all