Improved business with countries outside the European Union helped the UK’s trade deficit to narrow in April, official data showed today.
The gap between the value of imported and exported goods was a £3.1bn deficit, down from £3.4bn a month earlier.
The figure beat City forecasts.
Exports to countries such as the US and Japan drove the improvement as the deficit with non-EU nations narrowed to £1.4bn from £2.3bn.
The recent decline in the value of the pound has made UK goods cheaper abroad, although the position did not filter through to EU demand in April.
EU exports slipped 6% as the deficit with EU countries reached £1.7bn in April, compared with a figure of £1bn in March.
That is the widest deficit since March 1990.
It is also the first time since 1997 that the EU trade deficit has been worse than the non-EU figure.
HSBC economist John Butler said: “This is a reflection of how weak demand is in Europe at the moment.
“In contrast there are signs of a post-war rebound in the United States and other parts of the world.”
The trade in goods deficit is still running at around 3.5% of GDP, but a continued surplus in services, particularly in the financial sector, means the UK’s overall current account deficit is smaller.
The figure, including trade in both goods and services, was provisionally estimated by the ONS at £1.9bn in April, down on the £2.1bn figure seen in March.
The figure includes a surplus of £1.2bn in services.
In the three months to April, the balance on trade in goods and services was £5.4bn compared with £5.7bn in the previous three months.
However, latest trend estimates still suggest the deficit is widening, the ONS added.
References: EGi News 10/06/03
