By Maximilian Clarke

A £400 million surge in the value of UK exports has further closed the UK’s trade deficit for goods and services to £1.9 billion in August.

Declining exports of cars were offset by £200 million increases in fuel, ‘intermediate goods’ and food, tobacco and alcohol, the Office for National Statistics’ latest figures show. Ongoing financial crisis in the European Union did little to dent demand for UK exports, with the EU accounting for much of the increase in orders.

Amidst plummeting levels of employment and concerns that the private sector is not in a position to absorb the jobless, the role of international trade in the UK's economic recovery is paramount.

“The government must support a national export drive. Unless we accelerate the pace of export growth and we gain market share from imports in the domestic market, it will be difficult to sustain UK growth. The government must strengthen its backing for SME exporters in key areas such as trade finance, insurance and promotion. While a competitive pound and low interest rates can help our exporters, further efforts are needed to ensure that our businesses can compete equitably with foreign exporters. On their part, Britain’s exporters must make every effort to diversify their sales towards fast growing economies such as India, China and Brazil.”

Orders from Italy, Spain, France and Germany all fell by between £500m and £100m, whilst the Netherlands and Ireland swelled by £700 million. The surplus in services trade remained unchanged at £5.9 billion

“The figures provide a welcome contrast to the steady flow of negative news we have recently,” commented David Kern, Chief Economist at the British Chambers of Commerce. “However we cannot underestimate the challenges ahead for exporters, particularly in the face of the serious problems facing the Eurozone, which remains our major trading partner. As the fiscal austerity plan dampens domestic demand, net exports have to be the main engine of Britain’s economic recovery.

“This means that the government must support a national export drive. Unless we accelerate the pace of export growth and we gain market share from imports in the domestic market, it will be difficult to sustain UK growth. The government must strengthen its backing for SME exporters in key areas such as trade finance, insurance and promotion. While a competitive pound and low interest rates can help our exporters, further efforts are needed to ensure that our businesses can compete equitably with foreign exporters. On their part, Britain’s exporters must make every effort to diversify their sales towards fast growing economies such as India, China and Brazil.”


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