The trade deficit the UK faces has decreased to £3.2 billion in the November period. This can be directly associated with the higher exports of goods to Europe.
The UK`s exports of products increased by 2% between October and November – the total being £25.3bn. The reason for this increase is mainly due to the increase of trade with the European Union.
The main exports which have helped increase the exports to the EU are being attributed to Chemical Export. However the UK has also started to import more from the EU. The current amount imported is at an all-time high of £19.2 billion attributed to European car manufacturers.
It`s not all good news; forecasters are predicting long term exports to fall over the coming years. This will result in a widening trade deficit something the government will want to tackle.
Update June 2016:
UK trade deficit falls after record rise in exports
2016 is proving to be a good year for reducing the UK trade deficit according to recently released figures. In fact the volume of goods exported from Britain climbed by a whopping 11.2% in April this year – that is the biggest monthly recorded increase since records began back in 1998.
Due to this increase in goods export, the country’s trade deficit fell to a lower level than was predicted for April. This is good news too as it has also been revealed that the UK high street, as well as the manufacturing business sector, have both seen healthy figures reported. Business analysts are now saying the the UK economy has steadied since January, despite the announcement of the EU referendum.
While the growth in exports from the UK mainly came from other EU countries, there was also a small rise in sales from countries outside of the EU. Compared with last year, UK exports have increased by 10.3% inside Europe, and 1.9% outside of Europe.
Despite the rise in exports to the EU, during April alone our exports to the rest of the world saw a rise of £1.3bn to a new record level of £14bn. That is not bad at all when compared with a £900m rise in exports to the EU.
According to the figures from the Office for National Statistics, the trade deficit in goods fell to £10.5bn from a downwardly revised £10.6bn in March. Our increased exports to the EU comes after a general rise in economic growth in other member states, and in the face of previously fast growing economies such as South Africa, Russia and Brazil falling into recession.
Despite the heightened uncertainty of the European Referendum, the figures give a lot of hope to exporters and the rise in industrial production in April, along with good retail sales growth, has certainly helped them to achieve decent levels of export rates.