Britain's official trade deficit narrows in June

10th August 2010, Comments 0 comments

Britain's trade-in-goods deficit narrowed to a better-than-expected 7.4 billion pounds (8.9 billion euros, 11.7 billion dollars) in June as exports hit a two-year high, official data showed Tuesday.

The result compared with a downwardly-revised deficit of 8.0 billion pounds in May, the Office for National Statistics said in a statement. The ONS had originally put May's deficit at 8.1 billion pounds.

Analysts had meanwhile forecast June's deficit to stand at 7.8 billion pounds, according to a survey by Dow Jones Newswires.

"The narrowing in the trade in goods deficit ... was driven by a solid rise in exports," said Capital Economics analyst Vicky Redwood.

"That said, it's hard to get too excited. The narrowing did little more than reverse May's sharp widening in the deficit. And the more forward-looking survey measures of export orders fell again in July.

"Accordingly, we continue to doubt that any trade boost will be big enough in the near-term to offset the effects of the severe fiscal squeeze on consumers and the domestic economy," she added in reference to the British government's austerity measures.

The ONS added that British exports rose 4.3 percent in June to 22.4 billion pounds -- the highest level since July 2008. Exports to non-European Union countries hit their highest level since records began in 1998, while exports to the US reached the the highest point since records began in 1988.

Imports also gained, rising 1.0 percent to 29.8 billion pounds in June, the second highest level on record.

© 2010 AFP

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