By Maximilian Clarke
UK exports worth record £26.5bn, coupled with a £500m drop in imports have slashed the UK’s monthly trade deficit from £4.3bn to £1.6bn, the Office for National Statistics’ today (Friday) confirmed.
The services sector boosted its surplus to £10bn, despite an increase in the import of services, as UK businesses increasingly turn their focus overseas to counteract low domestic demand and insecurity across the eurozone.
“The massive reduction in the UK’s trade deficit in October will certainly bring some Christmas cheer to the City and Government, but this may be short lived as the UK’s key export markets struggle, with the Eurozone staggering on without conclusive political action while the US and other developed economies begin to feel the knock-on effects", commented Kah Chye Tan, Head of Trade and Working Capital, Barclays Corporate.
“The global trade picture is now increasingly a story of strengthening Asia-Africa and Asia-Latin America trade flows. There is still huge potential for UK companies to break into the supply chains that emerge as these trade corridors grow, but it means taking on a level of investment and risk for which appetite seems limited within the wider UK business community at present.”
UK Trade & Investment and in particular the UK’s trade minister, Lord Green, have been fostering relationships with high growth markets, reflected by the surge in exports.
Chemicals and capital goods continue to perform strongly, with exports rising in value by £458m and £608m respectively, in the three months to October compared to the 3 previous year.
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