By Marcus Leach
A boost in exports has seen the UK's trade gap narrow in May, according to data released today (Tuesday) by the Office for National Statistics.
The trade deficit fell to £2.7bn, compared with £4.1bn in April, with the seasonally adjusted volume of exports 6.6% higher, while imports rose 1%.
The goods deficit was £8.4bn, compared to £9.7bn in April, while services showed an unchanged surplus of £5.6bn.
Other data showed that manufacturing output unexpectedly rose by 1.2% in May, thanks to an extra working day as a result of a postponed bank holiday.
“The trade deficit shrank in May, with underlying export volumes increasing by 6.6% on the month, and imports rising by only 1%. We shouldn’t place too much emphasis on one month’s figures, but the strong improvement in May comes after a disappointing figure in April," David Kern, Chief Economist at the British Chambers of Commerce (BCC), said.
"Unusually, UK exports to non-EU countries were higher than exports to the EU. This shows that exporters are adjusting to global reality, as growth in the eurozone continues to stagnate, and the main opportunities for our exporters will remain outside Europe.
“So far, the rebalancing of the UK economy towards exports has been too slow. But if this positive trend continues, the unjustified pessimism surrounding the economy will be dispelled.
"British exporters have huge untapped potential, but they need the government to do more to help them compete globally. Bold action in areas such as trade finance and insurance, the creation of a business bank and commitments to improve infrastructure would help to drive growth in UK exports.”
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