The UK trade deficit shrank more than expected in October to its lowest level since March as a result of the decline in fuel imports from outside the EU, according to the Office for National Statistics (ONS). The deficit in the overall trade balance of the kingdom fell to 2 billion USD in market forecasts of a retreat of 2.8 billion GBP. Last month was reported level of 2.4 billion GBP. According to experts from the ONS the contribution of net trade to GDP growth in the third quarter was negative – of 0.5% points. The revised data for October will lead to less negative contribution, but at this stage it is difficult to determine the exact dimensions. According to the data, exports of goods increased by 200 thousand GBP between September and October, mainly due to the rise in exports of silver.
“Unconfirmed data show that in this particular commodity. India is the main trading partner of the United Kingdom”, highlighted by the ONS.
The imports fell c 700 thousand GBP, reflecting the significant retreat in imports of fuels. However, the decline was offset by an increase in imports of machinery and transport equipment. The balance of trade in oil in October was a deficit of 800 million GBP from a deficit of 1.6 billion GBP in September.
British trade balance with countries outside the EU has granted 3.5 billion GBP in October – the lowest level since March. The exports to countries outside the EU has in turn increased by 100 million GBP. In its latest quarterly economic forecast British Chamber of Commerce said it expects slower growth at the end of 2014 due to lower exports. According to the business economy remains heavily dependent on domestic consumption.
“Our dependence on consumer spending and mortgages means that the UK economy is particularly sensitive to interest rates. All increases in short-term interest rates could pose a huge risk to our economy. It will also have an impact on important economic investment. Exports UK is unchanged and is crucial to reassess the global strategy of growth of exports of the country”, the report said.