By Max Clarke
The UK’s deficit for trade in goods and services narrowed to £3.0 billion for January 2011, down from December’s high of £5.5 billion; while trade in services alone stood at an estimated surplus of £4.1 billion, according today's trade figures published by the Office for National Statistics.
The trade in goods deficit with EU states again narrowed to £2.9 billion, while the deficit with non EU states fell to £4.2 billion.
Commenting on the trade figures is David Kern, Chief Economist at the British Chambers of Commerce (BCC):
“The January figures are better than expected, with the trade deficit narrowing and robust growth in exports in goods and services, as imports fell. While these figures reverse a disappointing performance seen in previous months, they support our assessment that the economy returned to positive growth in the first quarter of 2011, and that the recovery will be export-led.
“But we cannot afford to be complacent. Since the Government’s tough deficit cuts will inevitably dampen domestic demand, Britain’s recovery will depend on a continued improvement in our international trading position. The growth in exports must be sustained and accelerated.
“Our research shows that more than two-thirds of companies do not export. Britain’s exporters must be able to compete on equitable terms so that they can break into new markets overseas. In this month’s Budget, the Government needs to remove competitive disadvantages faced by British firms. Small and medium-sized companies are not given the same level of support as those in some of our major competitor countries, and they must be encouraged to move into fast-growing emerging markets such as China, India and Brazil.”