Time to get a profit on Sterling: UK trade gap widens despite rise in exports
By Ed Crooks, Economics Editor
Published: February 10 2004 12:46 | Last Updated: February 10 2004 12:46
Britain's trade deficit with the rest of the world grew to a new record in the last quarter of 2003, in spite of a steep rise in exports, as the pound hit a new 11-year high against the US dollar.
Official figures showed a deficit in trade in goods and services of £9.8bn, up from £9.1bn in the third quarter. For 2003 as a whole, the deficit was £35.8bn, up from £31.4bn in 2002.
The Office for National Statistics said the trend in the trade deficit was widening.
The rise last year came in spite of respectable growth in exports. Goods exports excluding oil and erratic items rose by 2.3 per cent in value in the quarter, and 2.4 per cent by volume.
However, Britain's services exports, which account for about a third of total exports, have been weaker, rising just 0.4 per cent in value terms in the quarter.
Imports, meanwhile have been even stronger than exports. Imports of goods, excluding oil and erratic items, rose by 4.8 per cent in value terms and 5 per cent in volume in the quarter.
The breakdown of the figures by region revealed some potentially worrying trends in the outlook for British exporters. By far the strongest rise in exports has been to countries outside the European Union, with an increase of 3.3 per cent in the quarter and almost 20 per cent over the same period of 2002 in the value of goods exports.
China was by far Britain's fastest-growing export market, with goods exports rising by 50 per cent in the year to the last quarter of 2003. The US has been another very strong market, with goods exports rising 14.7 per cent over the same period.
With the rise in the pound to its highest level for more than a decade, at about $1.87, exports to the US and countries with currencies pegged to the dollar, of which China is one, may be squeezed. |
