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UK trade deficit narrows in August UK trade deficit narrows in August
(35 minutes later)
The gap between the amount the UK imports and the amount it exports narrowed significantly in August, the latest official figures show. The gap between the amount the UK imports and the amount it exports narrowed in August, the latest official figures show.
The Office for National Statistics (ONS) said the UK's trade deficit in goods and services stood at £1.9bn in August, compared with £3.1bn in July.The Office for National Statistics (ONS) said the UK's trade deficit in goods and services stood at £1.9bn in August, compared with £3.1bn in July.
UK exports fell again in August, but imports fell by more. But the narrowing was down to a fall in imports rather than a rise in exports.
Separate figures from the ONS also showed a fall in output from the UK's construction industry.Separate figures from the ONS also showed a fall in output from the UK's construction industry.
Construction output dropped by 3.9% in August after a 1.9% rise in July, the ONS said.Construction output dropped by 3.9% in August after a 1.9% rise in July, the ONS said.
Concerns remain Eurozone weakness
The trade deficit headline figure masks a wide disparity between the UK's trade in goods and its trade in services. Goods exports fell by £0.7bn to £23.2bn in August, the ONS said, although most of that was attributed to a fall in oil exports, particularly to countries outside of the EU.
UK exports of goods continued to be significantly outweighed by imports of goods in August, the ONS figures showed, though the gap narrowed slightly to £9.1bn. Imports fell more, by £2bn, narrowing the goods trade deficit to £9.1bn.
Goods exports fell by £0.7bn to £23.2bn, with most of that attributed to a fall in oil exports, particularly to countries outside of the EU.
But imports fell more, by £2bn, narrowing the gap.
In contrast, the UK continues to run a surplus in its trade in services, selling more abroad than it buys in.In contrast, the UK continues to run a surplus in its trade in services, selling more abroad than it buys in.
Analysts gave a cautious welcome to the narrowing of the deficit, but said it was not a sign of much improvement in the UK economy. Analysts said the narrowing of the trade deficit did not detract from concerns over the health of the eurozone, and the impact that is having on UK exports.
"The narrowing of the overall deficit is a good result on the face of it, but a welcome technical improvement doesn't necessarily alleviate concerns about the UK's trade performance," said Lee Hopley, chief economist at EEF, the manufacturers' organisation. "It's easy to see why exports are declining," said Chris Williamson, chief economist at Markit.
"The trend in exports remains downbeat... while some of the decline can be attributed to oil, there has been a slide in manufactured exports generally over the past year. "Growth has slowed sharply in the eurozone, with even Germany facing the possibility of a renewed recession. Sanctions with Russia are clearly hurting European trade.
"In addition, just as demand is slumping, sterling's appreciation is making UK goods less competitively priced in overseas markets."
Manufacturers said there was a persistent downward trend in exports.
"The trend in exports remains downbeat," said Lee Hopley, chief economist at EEF, the manufacturers' organisation. "While some of the decline can be attributed to oil, there has been a slide in manufactured exports generally over the past year.
"The data provide yet another reminder that the export part of the rebalancing equation continues to face some significant challenges.""The data provide yet another reminder that the export part of the rebalancing equation continues to face some significant challenges."