Business

UK trade deficit narrows in April as exports jump

Ship enters Felixstowe port

Britain's trade deficit narrowed in April after goods exports rose to a near three-year high.

Stronger exports of chemicals, oil, machinery and aircraft parts were behind the improvement, the ONS said.

The Office for National Statistics said the deficit was £3.294bn, from £3.532bn in March, the lowest level since September 2015.

Recent private sector surveys have pointed to stronger exports and industrial output.

The total value of all goods exported jumped by 11.2% on the month, the biggest rise since records started in 1998.

That rise took the value of goods exports in April to £26.123bn - not far from an all-time high set in June 2013.

Growth impact

UK economic growth slowed to a quarterly rate of 0.4% in the first three months of 2016, down from 0.6% in the last three months of 2015, with the trade deficit accounting for much of the drag.

However, the ONS said that revisions to March trade data pointed to less of a drag on GDP from trade than first estimated.

Howard Archer, chief UK economist at IHS Global Insight, said that data pointed to "welcome and much-needed" improvements for the economy.

"Along with the jump in industrial production in April and decent retail sales growth, the trade data suggest that UK GDP growth could be holding up better in the second quarter than has been thought, despite the heightened uncertainty," he said.

Sterling fell to its lowest since late 2013 on a trade-weighted basis in April, although falls in the price of UK exports typically take longer to feed through into foreign demand.

However, Mr Archer said that "the marked overall weakening of the pound since late-2015 may be feeding through to help UK exporters".

Related Topics

More on this story