UK trade gap narrows during March as exports rise

Thursday 17 May 2012

Manufacturing output rose in March

The UK trade deficit in goods and services narrowed slightly during March 2012, it has been reported.

According to the Office for National Statistics, this was down by £200 million from a trade gap of £2.9 billion in February 2012.

David Kern, chief economist at the British Chambers of Commerce, explained that exports rose more than imports, boosting the economic recovery.

However, he claimed that the figures show a mixed picture for the UK economy, and a rebalancing towards exports which 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," Mr Kern stated.

"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."

He claimed that the strength of the pound, particularly against the euro, will only make the situation worse.

Mr Kern said the government must take action to address the issues faced by UK exporters, as additional support will help them compete on equitable terms.

Posted by Dan Smith