UK trade deficit narrows

It’s been a funny 24 hours, hasn’t it? The UK has had good news from the tennis and good news on the economy. Unusual, particularly in the latter’s case, where the news may appear better than it actually is. Figures from the Office for National Statistics released today show the UK’s trade deficit narrowed to £1.5 billion in July from a £4.3 billion deficit in June.

There was a 9.3 per cent rise in exports of goods to £25.8 billion, and a 2.1 per cent drop in imports by £700 million to £32.9 billion.

Before everyone gets too excited, though, the dramatic rise is partly down to June’s figures being so terrible after the disruption caused by the Queen’s Diamond Jubilee bank holiday. Capital Economics’ Martin Beck urged caution when the figures were published, saying:

‘This is unlikely to herald the start of the long-awaited rebalancing of the economy towards the external sector.