UK Trade Deficit Narrows in March

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The FINANCIAL — Britain’s trade deficit narrowed in March after widening sharply the month before, official data showed on May 8, according to Nasdaq.

The gap between the value of goods the U.K. sold abroad and what it bought was 10.1 billion pounds ($15.6 billion) during the month, the Office for National Statistics said. This compares with an upwardly revised GBP10.8 billion deficit in February.

The deficit in March narrowed as exports recovered slightly, while imports slipped from February, according to the ONS.

The trade deficit widened by GBP1.5 billion in the first quarter compared with the fourth quarter, according to the ONS. This likely will be a “very small” drag on gross-domestic-product growth for the first quarter, it said.

Trade was a thorn in the side of the British economy throughout most of 2014, even though it managed to make a positive contribution to growth during the last quarter of the year. However, most analysts believe the sudden dip in exports means trade has again become a hindrance into 2015.

“The strength of the pound against the euro threatens to dilute the upside for U.K. manufacturing exports to the eurozone,” said Howard Archer, economist at IHS Global Insight.

Official data released last month showed a slackening in both manufacturing and construction output, which drove the British economy to grow at a slower pace in the first quarter of 2015. Business surveys suggest exports continued to hurt U.K. manufacturers in April.

Britain’s exporting performance has been an issue in the campaign for the general election. U.K. Treasury chief George Osborne pledged in 2010 to double exports to GBP1 trillion by 2020, but sales abroad have remained mostly flat since then. The volume of U.K. good exports as a share of the country’s economy is low compared to other Western nations.

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The main opposition Labour Party has argued for the government providing more help to small and medium companies to open overseas markets.


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