UK trade gap is still too wide, warns BCC

Thursday 16 May 2013

Manufacturing output rose in March

The UK is still not making enough progress in rebalancing the economy towards net exports, the British Chambers of Commerce (BCC) has claimed.

David Kern, chief economist at the trade group, was commenting after the Office for National Statistics reported a trade deficit of £3.1 billion in March.

The gap between imports and exports was down from £3.4 billion in February, but according to Mr Kern, remained too high.

“While it is pleasing to see an upturn in exports in March, Britain’s trade deficit remains disappointingly large," he stated.

"It is clear that we are not making enough progress in rebalancing the economy towards net exports."

Mr Kern noted that the figures highlight the need to make further inroads into faster-growing regions across the rest of the world.

He said the eurozone - Britain's biggest trading partner - is continuing to struggle, and this is impacting on the UK's ability to increase exports in the region.

"More action is needed to utilise the untapped potential of many British exporters," Mr Kern added.

He said this is particularly the case in the services sector, which can prove to be a major asset to the UK economy in the months and years to come.

If UK business is to drive a sustainable economic recovery, then services has an important role to play, he claimed.

"The government must implement measures it has previously announced to support firms looking to break into new markets," Mr Kern stated.

"In addition, we clearly need a national export strategy focusing on key areas such as trade finance, insurance, and promotion, to enable companies to compete on equitable terms."

The latest Office for National Statistics figures revealed that the value of UK exports actually rose by 3.5 per cent between February and March, which is good news for British business.

However, the cost of imports also increased during the same period - rising by 2.6 per cent.

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Posted by Dan Smith