Wednesday 12 December 2012
A widening in the trade deficit in goods and services during October should not create undue concern for businesses, it has been claimed.
The Office for National Statistics recently revealed that the trade gap widened from £2.5 billion in September to £3.6 billion.
But David Kern, chief economist at the British Chambers of Commerce, said this outcome was not surprising given the significant improvement witnessed the previous month, and the erratic nature of the monthly figures.
He explained that in the three months to October, the underlying volume of exports rose by 1.7 per cent year-on-year, the same as that of imports.
And in the same quarter, the volume of exports to countries outside the EU rose by 9.1 per cent, reflecting a greater focus on faster growing markets.
“The measures announced by the Chancellor in his Autumn Statement, which will provide greater support for exporting companies looking to break into new markets, are very important," Mr Kern stated.
"With austerity measures set to continue in the UK until at least 2018, it is clear that a sustainable recovery will have to rely significantly on diversifying and restructuring our economy towards net exports."
He claimed that UK companies have "massive untapped potential to expand", but need the right backing to compete and penetrate into new expanding markets.
"Further action from the government is needed in key areas such as trade promotion, finance, and insurance, and this must be part of a continued shift of priorities towards policies that will drive growth," Mr Kern said.
Posted by Dan Smith