UK trade deficit down in January
by Elaine Frei
The UK’s trade deficit narrowed in January, according to the Office for National Statistics. The main reason was that the value of imports fell by £743 million as exports remained roughly even. The January trade deficit was at £6.22 billion, down from £6.95 billion in December. This was much lower than the anticipated deficit of £6.9 billion and the smallest since October 2005.
Exports to EU nations were down by 3.5 percent, while imports from EU countries also dropped by 3.5 percent. Exports to non-EU countries were up by 6 percent, while imports from non-EU states were down by 2 percent. The deficit in goods trade with non-EU countries was at £3.68 billion in January, down from £4.32 billion in December.
Analysts still worried that the numbers relating to the trade deficit were not completely reliable. Even though VAT fraud has declined since last year, the analysts feel that it is still distorting the trade figures. The analysts did, however, concede that the new figures implied that sterling’s recent strength hasn’t hurt trade as much as some thought it would.
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