By Marcus Leach
Official figures released today (Tuesday) show that the UK's trade deficit narrowed in March, driven in particular by stronger exports to the US, China and Russia.
The Office for National Statistics (ONS) data reveals that the seasonally adjusted trade deficit in goods and services was £2.7 billion, against £2.9 billion in February.
With exports to non-EU countries increasing there is the suggestion that continuing eurozone problems are starting to impact the UK on a more serious level.
Exports of pharmaceuticals and cars to the United States and China boosted exports to non-EU countries.
“These figures show a mixed picture for the UK economy. Comparing March with February, the trade deficit is down and exports rose more than imports," David Kern, Chief Economist at the British Chambers of Commerce (BCC), said.
"But looking longer-term, we can see that the deficit worsened in the first quarter of 2012 both quarterly and annually. This shows that the rebalancing of the UK economy towards exports is still too slow.
“The government’s deficit-cutting measures will continue to squeeze domestic demand, which is why a sustainable UK recovery must rely on higher exports, business investment and replacing imports with goods manufactured here at home. The renewed crisis in the eurozone and difficulties in the wider global economy mean British exporters will face serious challenges when trying to maintain positions in international trading markets. The strength of the pound, particularly against the euro, will only make the situation worse.
“The government must take action to address the issues faced by our exporters. British companies, particularly small- and medium-sized firms, have huge untapped potential to increase exports. Giving them extra support will help them compete on equitable terms, and will benefit the national economy as a whole.”
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