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UK trade deficit grows amid rise in lorry orders for Christmas deliveries UK trade deficit grows amid rise in lorry orders for Christmas deliveries
(about 7 hours later)
A demand for foreign trucks and lorries has worsened Britain’s trade deficit as transport companies scramble to buy vehicles to ferry around internet shopping deliveries in the run-up to Christmas. A demand for foreign lorries has worsened Britain’s trade deficit as transport companies scramble to buy vehicles to carry internet shopping deliveries in the run-up to Christmas.
The rise in imports of heavy goods vehicles sent the total trade deficit to £4.1bn in October, from a revised £1bn in September. The rise in imports of vans and heavy goods vehicles sent the deficit in goods to £11.8bn compared to £8.8bn in the previous month.
The Office for National Statistics (ONS) attributed much of the widening deficit to the trade in goods, where the gap reached £11.8bn in October, compared with £8.8bn the previous month, dealing a blow to the government’s efforts to rebalance the economy towards manufacturing. The Office for National Statistics (ONS) said imported consumer goods were also factors in the worsening deficit in total trade to £4.1bn in October, from a revised £1bn in September.
Analysts said the export of manufactured goods held up well but was unable to keep pace with rising imports. Analysts said exports, especially of services, had held up well, but manufacturers were under pressure from the high pound and lacklustre demand for goods on the continent, where a slow recovery from the euro crisis and a long recession has failed so far to translate into higher sales.
Falling North Sea oil exports and rising imports of crude oil have played an increasing part in the widening trade deficit, but the ONS also highlighted the surge in imports of trucks and lorries to satisfy the growing demand for transport vehicles. The figures reverse an improvement in the summer and mean the average monthly deficit has averaged £2.7bn, dealing a blow to the government’s efforts to rebalance the economy towards manufacturing.
Much of the rise is linked to purchases by commercial vehicle operators boosting their fleets before Christmas. The figures showed that imports of road vehicles increased by £300m, or 7.9%, to a record high of £4.6bn in October. David Kern, the chief economist of the British Chambers of Commerce (BCC), said the figures raised the risk that trade would continue to be a drag on UK growth into the fourth quarter.
While Britain has become a major car exporter in the past two decades, most of Britain’s truck manufacturing has disappeared overseas. The last major vanmaking plant, Ford’s Transit factory in Southampton, was closed in favour of a rival Ford factory in Turkey three years ago. “Although the main reason for the wider deficit in October was a surge in imports, it is clear that our exports are not growing fast enough to close the gap, as our recent forecast demonstrates,” he said. “If we are to redress the balance and reverse our long-running trade deficit more must be done to help support export growth, including improved access to funding for those looking to export.”
Falling North Sea oil exports and rising imports of crude oil have played an increasing part in the widening trade, but the ONS also highlighted the surge in imports of transport vehicles to satisfy the growing demand.
Much of the rise is linked to purchases by commercial vehicle operators boosting their fleets before Christmas. The figures showed that imports of road vehicles increased by £300m to a record high of £4.6bn in October.
While Britain has become a major car exporter in the past two decades, most of Britain’s lorry manufacturing has disappeared overseas. The last major van-making plant, Ford’s Transit factory in Southampton, was closed in favour of a Ford factory in Turkey three years ago.
More broadly, the import of goods jumped from £2.3bn to £35.4bn between September and October. This increase mainly reflected a rise in imports of finished products of £1.1bn.More broadly, the import of goods jumped from £2.3bn to £35.4bn between September and October. This increase mainly reflected a rise in imports of finished products of £1.1bn.
Exports of goods have decreased by £700m to £23.5bn, with many firms blaming the rising value of sterling for hampering their efforts to sell goods, especially to continental Europe and China. Exports of goods have decreased by £700m to £23.5bn, with many firms blaming the rising value of sterling for hampering their efforts to sell goods, especially to continental Europe and China. Several business studies have shown that many firms are cutting back on production and staffing levels as overseas demand levels out.
Several business studies have shown that many firms are cutting back on production and staffing levels as overseas demand levels out.
Britain’s poor trade performance weighed heavily on the economy in the third quarter, in which GDP growth slowed to 0.5%. The Bank of England expects growth to pick up in the fourth quarter to 0.6%.Britain’s poor trade performance weighed heavily on the economy in the third quarter, in which GDP growth slowed to 0.5%. The Bank of England expects growth to pick up in the fourth quarter to 0.6%.
Chris Williamson, chief economist at the financial data provider Markit, said: “The UK’s continuing disappointing trade performance is highlighted by the latest official data. Chris Williamson, the chief economist of the financial data provider Markit, said: “The UK’s continuing disappointing trade performance is highlighted by the latest official data.
“If oil is excluded, the trade deficit was the biggest on record in October. However, there are signs from the more recent survey data that exports are picking up again, aided by rejuvenating demand in the euro area in particular.”“If oil is excluded, the trade deficit was the biggest on record in October. However, there are signs from the more recent survey data that exports are picking up again, aided by rejuvenating demand in the euro area in particular.”
The ONS said UK trade performance was better than most G7 countries coming out of recession, but that it had slipped to the bottom of the table since 2013.The ONS said UK trade performance was better than most G7 countries coming out of recession, but that it had slipped to the bottom of the table since 2013.