The UK trade gap has significantly narrowed in August, according to the latest figures.
The ONS reported this morning that the deficit of trade in goods and services for August 2014 was £1.9 billion, compared with £3.1 billion in the previous month.
Notably, this is the first time in the past five months that the trade in goods deficit has narrowed and although exports fell in August, imports fell more heavily.
In detail, exports fell £0.7 billion to £23.2 billion, the lowest since September 2010. £0.6 billion of the decrease was attributed to a fall in oil exports and in particular, exports to countries outside of the EU. The second most significant fall was exports of chemicals; specifically medicinal and pharmaceutical products which fell £0.3 billion from the previous month.
Commenting on the figures, Ms Lee Hopley, chief economist at EEF said: “The narrowing of the overall deficit is a good result on the face of it, but a welcome technical improvement doesn’t necessarily alleviate concerns about the UK’s trade performance. The trend in exports remains downbeat, but not entirely surprising given the lack of evidence of much spark in the world economy.
“While some of the decline in goods exports can be attributed to oil, there has been a slide in manufactured exports generally over the past year. The data provide yet another reminder that the export part of the rebalancing equation continues to face some significant challenges.”