The gap between Britain’s imports and exports has widened to a record high, standing at its worst level since comparable records began in 1997, the Office for National Statistics (ONS) reported today.
Following a sharp drop in exports the trade gap widened to GBP4.3bn in June 2012, from GBP2.7bn in May. The UK had a deficit of GBP10.1bn on goods, which was only partly offset by a surplus of GBP5.8bn on services.
Total exports decreased by 4.6% between May and June, and although the UK exporters have faced challenges in Europe as a result of the prolonged debt crisis in the eurozone, June’s drop in exports was driven by weaker demand from countries outside the European Union. Exports of goods to EU countries fell 7.1% and exports to countries in the rest of the world declined by 9.6%.
Overall, exports of goods from UK manufacturers were down 8.4% to GBP23.5bn, after lower exports of oil, chemicals and cars, while imports of goods fell 1.2% to GBP33.6bn.
Chris Willliamson, an economist at Markit quoted by the Guardian, said it’s possible that the drop in exports could be partly blamed on the disruption to shipments caused by the extra public holidays for the Queen’s Diamond Jubilee. However, he went on to add that there is “clearly an underlying trend of worrying weakness in overseas demand”.
In the second quarter of 2012 as a whole, the trade gap increased to GBP11.2bn compared with a deficit of GBP7.8bn in the preceding quarter.