UK goods trade deficit narrows to £9.1bn in February

Nissan cars waiting to be exported at docks in South Shields The gap between the UK's exports and imports narrowed in February, official figures have shown

The UK's goods trade deficit with the rest of the world narrowed in February by more than expected, helped by a fall in imports, official data has shown.

The Office for National Statistics (ONS) said the trade deficit shrank to £9.1bn from £9.4bn in January.

Economists had expected a deficit of £9.2bn.

Imports fell 2.2% to £32.6bn in February, helping to offset a 1.6% fall in exports to £23.5bn - the lowest level of exports since November 2010.

The UK trade deficit is the measure of the difference between the value of goods the country exports compared with the value of the goods it imports.

The ONS said imports of aircraft and aircraft parts fell 46.3% in February, contributing to three quarters of the total fall in imports in the month.

Imports were also at their lowest level since April 2011.

The ONS said in the three months to the end of February, the goods trade deficit narrowed by £3bn to £26.2bn representing a fall in exports of 0.1% while imports were lower by 3.5%.

The UK's goods trade deficit with non-EU countries narrowed sharply to £2.9bn n February from £3.9bn January, against forecasts for a gap of £3.4bn.

Export target

Howard Archer, chief UK and European economist at IHS Global Insight, said the trade deficit figures would be a modest drag on first quarter economic growth.

He added: "Looking ahead, net trade will likely struggle to make a sustained, significant positive contribution to UK growth in the near term at least as imports are likely to continue to be underpinned by decent UK domestic demand.

"Nevertheless, the hope has to be that exports will increasingly benefit from global growth gradually picking up over the coming months."

The overall trade deficit in goods and services for February was £2.1bn, compared with a £2.2bn deficit a month earlier, thanks to the UK's trade surplus in its dominant services sector.

Although the trade deficit fell, the drop in exports means the latest figures provide mixed news for the Chancellor George Osborne's hopes of rebalancing the economy by boosting exports and reducing the UK's reliance on its services sector and consumer spending.

On Tuesday, the International Monetary Fund (IMF) said exports as well as business investment in the UK were disappointing, despite raising its forecast for economic growth in the UK this year to 2.9%.

Commenting on the trade figures, David Kern, chief economist at the British Chambers of Commerce said: "Judging by present trends it will be incredibly hard to meet the Prime Minister's export target of increasing exports to £1tn by 2020.

"The recent announcement by the chancellor that the Bank of England will make a contribution to supporting export finance is welcome, but much more needs to be done."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    07:20: ARM CHIPS
    chip

    ARM, which could well make the chips in your mobile phone, says it made $320m (£195.5m) of sales in the third quarter, up 12% compared with last year. It will probably sell $350m in the final three months of the year, it said.

     
  2.  
    07:10: RECKITT RESULTS
    Reckitt Benckiser products

    Reckitt Benckiser says it now expects full year revenue growth at the lower end of its total revenue growth target of 4-5%. The firm "delivered a robust performance in tougher markets in the third quarter" it said.

     
  3.  
    07:00: CHINA GROWTH BBC Radio 4

    China's economy grew by 7.3% in the three months to September, compared with expectations of 7.2%. But it's still the lowest growth in six years. The BBC's Chief Business Correspondent Linda Yueh tells the Today programme Chinese monetary policymakers want to slow the Chinese economic growth gradually and allow the rest of the world to get used to it. China is becoming a "middle income economy" she says and will revert to a normal path for a developed economy over time of around 3% to 4%.

     
  4.  
    Via Twitter Linda Yueh Chief business correspondent

    tweets: My interview with CEO of Oscar de la Renta fashion house, Alex Bolen, from Talking Business

     
  5.  
    06:41: ENGINEERING SKILLS Radio 5 live

    We don't have enough engineers in the UK or scientists for that matter argues Ann Watson of Semta, an engineering skills charity, on 5 live. She says: "We need a million scientists, engineers and technicians by 2020, We are starting to see a shortage in education; people training those recruits." The perception of engineering as a "dirty, oily industry" doesn't help, she says.

     
  6.  
    06:30: STOCK MARKET Radio 5 live

    Jane Foley, senior currency strategist at Rabobank is on 5 live talking about the falling stock market. "If we see stocks fall more we may see companies bargain hunting," she says. So more firms may start purchasing each other.

     
  7.  
    06:21: HEATHROW TRAVEL Radio 5 live
    heathrow

    Travel writer Simon Calder is on 5 live talking about the weather. He says he sees about 50 weather-related cancellations at Heathrow, so perhaps about 5% of flights so far. Flights to Frankfurt look hard to come by, he says.

     
  8.  
    06:12: FLIGHTS CANCELLED

    Heathrow airport has said this morning that around 10% of flights will be cancelled today as the remnants of Hurricane Gonzalo hit the UK. Flights with the 20 biggest carriers would be affected, it says. British Airways has already cancelled some ahead of the expected severe weather. The remains of the hurricane are predicted to bring heavy rain and gusts of up to 75mph in some areas, causing disruption to rush-hour travel. If you're travelling today it's worth checking before you arrive at the airport.

     
  9.  
    06:02: TOTAL CEO DEATH Radio 5 live

    Christophe de Margerie, the chief executive of French oil company Total, has died in an air crash in Moscow. Sarah Rainsford, the BBC's correspondent in Moscow says poor weather with low visibility is a possible cause of the crash. His plane crashed when it collided with a snow-clearing machine killing him and three crew, she tells 5 live.

     
  10.  
    06:01: Howard Mustoe Business reporter

    Good morning! Get in touch via email bizlivepage@bbc.co.uk or on twitter @BBCBusiness.

     
  11.  
    06:00: Matthew West Business reporter

    Morning folks, we have the latest public borrowing figures out at 9:30 today. But before that we have full year results from online retailer ASOS, and interim figures from Whitbread, plus the weather is promising to play havoc with the transport network today with 10% of flights out of Heathrow already cancelled this morning. We'll bring you everything as it happens.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.