Monthly figures for trade in April are out today, showing the deficit shrinking slightly compared with March. As we always say, these monthly figures can be volatile so some caution is needed.
The deficit on trade in goods and services stands at £2.6 billion; in March the deficit was £3.2 billion. Looking closer at the stats, the deficit in goods was at £8.2 billion, with the surplus of £5.6 billion in services offsetting that number. The narrowing of the deficit is mainly due to the UK's trade in goods with the EU, with estimations showing that imports from the EU fell by around £1.3 billion in April.
Looking wider than the month, in the three months to April, the deficit on trade with the EU rose by £1.5 billion to £15.4 billion, while the deficit with the rest of the world fell by £1 billion.
The volume of goods exports to the EU has gone down by approximately 5% between the second half of 2011 and the latest three months.
Rest of World
Exports to the rest of the world have seen an increase of 7% in the last three months.
In particular, exports to the US rose by 7% and imports were lower, so the surplus in trade in goods increased to £3.7 billion. The US is the UK's biggest single export market. Also good news with other non-EU markets, with exports to China increasing by 11% in the February to April period, and for the first time they averaged more than £1 billion a month.
In the autumn of 2011, the deficit with non-EU countries averaged £15 billion over a three-month period and the deficit with EU countries was around £11 billion. This situation is now reversed. It is important to note that prices (both export and import) have held reasonably steady in this period and so is an interesting switch to see - we will have to see if this continues.