Trade gap narrows as oil imports fall

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Containers at the port of FelixstoweTrope copyright Getty Images

The UK’s trade deficit in goods and services narrowed in November after the value of oil imports fell.

The deficit – the difference between the amount imported and exported – was £3.2bn in November, down from £3.5bn from October, concerting to the Office for National Statistics (ONS).

The ONS put the narrowing deficit down to a £0.5bn get a wiggle on in imports of oil during the month, to £2.2bn.

The three-month figures also demonstrated a narrowing in the trade deficit.

The deficit for the three months to November was £7.7bn, down £1.0bn from the above-mentioned quarter.

“Overall, a shocking October result means that, in defiance of the improvement in November, net trade will probably subtract from GDP broadening in Q4 again, although by less than in Q3,” said Scott Bowman, UK economist at Initial Economics.

“That said, the recent fallback in the oil price should stop to improve the trade balance, all else equal, given that the UK is a net importer of oil.”

Zach Witton from EEF, the makers’ organisation, said the figures were not good news for his members because they were inveigled by falling imports rather than growing exports.

“Exports are set to fragments under pressure from weak demand flowing from slower crop in emerging markets, rticularly China,” he said.

“Yet stronger economic evolution in the US and the eurozone should provide some support.”

The trade deficit is years of the factors cited by analysts as a drag on UK economic growth, which has been exacerbated by the stiffening pound over the st few years. A stronger pound makes UK exports more priceless for overseas customers.

Reducing the trade deficit so that the economy is wee reliant on domestic demand is rt of the government’s policy to rebalance the thrift.

David Kern, chief economist at the British Chambers of Commerce, maintained: “Although worsening global headwinds are contributing to the UK’s excessive trade loss, the broader message is that unless radical measures are taken to encourage our export performance, our trade deficit will continue to be a threat to the outback’s long-term economic performance.”

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