09/01/13

  • UK deficit in goods and services was £3.5bn in November 2012, compared with a deficit of £3.7bn in October.
  • In the three months to November 2012, exports to the European Union fell 3.7% year on year, while exports to the rest of the world rose 6.8%

Commenting on the UK’s trade figures, published today by the ONS, John Longworth, Director General of the British Chambers of Commerce (BCC) said:

"UK trade data have been particularly volatile recently, and may well have been influenced by special factors, such as the Olympics. Despite the slightly improved trade deficit seen in November, the figures suggest the external sector is still failing to provide any support to the recovery. The new data means the trade deficit was more than £7bn in the first two months of the fourth quarter. With a turnaround in December looking unlikely, net trade may well act as a drag on GDP growth in the final quarter of the year.

“Over the coming months, the government must do more to put international trade at the top of its agenda. There is still a lot of pressure on exports due to weak domestic demand and soft global growth, so UK businesses need all the help they can get if they are to succeed in driving an export-led recovery. Expanding trade promotion budgets is a good start, but why not go even further and introduce an Export Voucher scheme to help businesses on the cusp of exporting, so they can expand their capabilities and tap into fast-growing markets abroad. According to our latest economic survey, exports in the service sector have improved, which is encouraging, but this must not be choked off by a lack of access to finance to fund growth."

David Kern, Chief Economist at the BCC added:

“In spite of the slight reduction in the deficit, the figures are slightly larger than most analysts predicted. Although the deficit has fluctuated over the course of 2012, the average of £3bn per month is too large and shows that we are not yet seeing sufficient progress in rebalancing Britain’s economy towards net exports.

“It is not all doom and gloom, however. In the three months to November 2012, underlying exports rose 1.4% year on year, while imports increased by only 0.3%. The economy is also refocusing exports away from the European Union, to faster-growing areas, although the EU remains our largest single export partner. To reduce the deficit further, the switch in trade away from the EU must be even faster.

“The Chancellor announced in his Autumn Statement welcome measures to support exporting companies seeking to break into new markets. These must be reinforced and implemented effectively, and should be part of a national strategy aimed at strengthening UK exports. More action in areas such as trade finance, promotion, and insurance is needed, if companies are to have the right support to penetrate new and growing markets.”

Ends

Notes to editors:

ONS Trade Statistics: http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/november-2012/stb-uk-trade--november-2012.html

The British Chambers of Commerce (BCC) sits at the heart of a powerful nationwide network of 51 Accredited Chambers of Commerce, serving over 104,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

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