By Marcus Leach
With the value of British exports to eurozone and non-European Union countries falling, the trade deficit has reached a 15-year high.
The trade deficit, which measures how much imported goods and services exceed exports, has reached £4.3 billion, the highest it has been since comparable records began in 1997.
Most worrying is the rate of rise, in May the deficit was £2.7 billion. With global growth slowing it appears the demand for British goods is being hit hard.
“It is disappointing to see such a large trade deficit in June. Although the monthly figures would have been affected by public holidays, such as the Diamond Jubilee, it is worrying that the trade deficit in the second quarter as a whole was much higher than in the first," David Kern, Chief Economist at the British Chambers of Commerce (BCC), said.
"Underlying export volumes fell by 3.3% in the second quarter, while import volumes fell by only 0.5%. There is no question that British exporters are facing major challenges as a result of problems in the eurozone, but the rebalancing of the UK economy towards exports is taking too long.
“British exporters have untapped potential to expand, but they need more government support to help them compete globally and diversify towards growing markets outside the EU. We need firmer action in key areas such as trade finance, promotion and insurance. More infrastructure spending and the early creation of a business bank would make a major contribution towards stronger growth in UK exports.”
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