Trade gap respite is only temporary

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The Independent Online
BRITAIN'S TRADE deficit with the rest of the world narrowed in October from record levels in September, although analysts said a recent surge in cheap imports meant the improvement in the trade position was only temporary, writes Lea Paterson.

The UK's deficit on traded goods was a lower-than-expected pounds 1.6bn in October, according to official figures released yesterday, down from pounds 2.5bn in September. Trade in services appeared little affected by the weak international economy, and yielded a healthy surplus of pounds 1.1bn.

The overall trade deficit for October was down to pounds 0.5bn from pounds 1.5bn in the previous month.

Brian Wilson, the Trade Minister, said: "These figures suggest the September figures were well out of line and that Britain's exporters are continuing to fare reasonably well in the face of extremely difficult world conditions."

However, most economists were gloomy about the outlook for UK trade, and preliminary indications for November were worse than City expectations. According to the Office for National Statistics, the deficit in traded goods with countries outside the EU widened to pounds 1.8bn in November from pounds 1.4bn in October.