Trade deficit widens

The trade deficit in goods grew by £0.9 billion between May and June 2016, according to the Office for National Statistics.

The UK trade deficit in goods was £12.4 billion in June 2016.

Other findings:

  • exports of goods increased by £1.billion to £24.6 billion 
  • imports of goods increased by £1.8 billion, reaching a total of £37 billion.

Suren Thiru , head of economics at the British Chambers of Commerce, said:

"June's disappointing figures point to a longer term weakness in the UK's underlying trade position, with the deficit for the first half of 2016 markedly higher than for the same period in 2015.

"The persistent weakness in global trade growth since the financial crisis, particularly in key markets, has continued to stifle the UK's export performance."

Michael Martins, chief economist at the Institute of Directors , said that the widening of the trade deficit could be partially offset in the coming months by a drop in the value of the pound:

"The depreciation of sterling should help bring in foreign currency, as foreign assets bring in nominally higher returns, while also paying out less to foreign investors.

"The key unknown variable will be whether foreign investors maintain investment in the UK, given its uncertain future relationship with the EU."

Lee Hopley, chief economist at EEF , the manufacturers' organisation, said:

"Amidst the wavering levels of confidence however we should take away some positive news, firstly that manufacturing entered this period of uncertainty from a relatively strong stance and the weaker exchange rate could yet bring benefits on the export side."

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