UK trade deficit surges in November

January 11, 2017
Source: BBC
UK trade deficit surges in November

The UK's trade position deteriorated sharply in November from the previous month.

The deficit on trade in goods and services was estimated at £4.2bn in November, up from £2.6bn in October.

The widening gap reflects a £3.3bn surge in imports according to the Office for National Statistics (ONS).

For the three months to the end of November the trade deficit rose a more modest £0.1bn to £35.9bn. That was compared to the three months to August.

For November, the deficit on trading in just goods (and not services) increased to £12.2 billion, widening by £2.3 billion from October.

A £1.4bn rise in machinery and transport equipment imports was the biggest contributor to that figure the ONS said.

In particular the ONS noted a rise in imports of laptops and tablets from China. It also highlighted a rise in transport goods, which includes ships and railway equipment, from countries outside the European Union.

'Encouraging signs'

Paul Hollingsworth, UK economist at Capital Economics said that while on the face of it the trade figures look disappointing, they contained some "encouraging signs".

He highlighted the improved growth rate in goods exports in November. For the three months to November that rate improved to 1.1%, from negative 2.7% in October.

Mr Hollingsworth also noted that growth in import volumes slowed.

"Overall, the latest figures suggest that economic growth has maintained pace, and is starting to become better balanced," he said.

Economists prefer to look at data for trade volumes which strip out the effect of rising prices and currency moves.

The monthly trade data also tends to be volatile and subject to revisions.

Worries over the quality of the trade data prompted regulators to remove its status as a "national statistic" in November 2014. The ONS is currently working on an application to regain that status.