Britain’s trade position worsened in June, as exports fell for a third month in another blow to the government’s ambitions to rebalance the economy.
The trade in goods deficit widened unexpectedly to £9.4bn from £9.2bn in May after British exports fell more than imports according to the Office for National Statistics (ONS). Economists had expected the deficit to shrink to £8.8bn, and said that tensions between Russia and the west, a weak eurozone economy, and a strong pound making British goods more expensive abroad, were all likely to weigh on foreign demand for UK goods in the short term at least.
Chris Williamson, chief economist at Markit, said Britain’s trade position was likely to deteriorate in the coming months, weighing on UK growth.
“The trade figures are some of the worst seen in recent history. Exporters are being hit on two front. First, by an appreciating exchange rate, which has risen 10% over the past year.
“Second, already weak demand in many overseas markets is being hit further by growing uncertainty about the Ukraine crisis, especially in northern Europe. Escalating geopolitical events in Gaza and Iraq add to the sense that global risk aversion is creeping higher, which will inevitably mean slower economic growth.”
via The Guardian