The trade deficit, which is the difference between the value of goods exported and imported, narrowed to £9.2bn in November last year, from £9.5bn in October, according to the Office for National Statistics.
This sounds good, but unfortunately economists had been forecasting that the difference would shrink to just over £9bn, showing a stronger exporting economy. Alas, this hasn’t happened.
It’s worth noting that exports to EU countries rose by 8.9% in November compared with October, but again, this is no good when exports to the bloc year-on-year were down 5.9% in the three months to November.
Luckily, if you include traded services in addition to traded goods, the figures look healthier. Britain traditionally has a strong surplus of exported services, and this helped the overall trade deficit shrink from £3.7bn to £3.5bn.
But because the closing of the gap is happening more slowly than expected, many are fearful that the UK economy will suffer as a result. The government has been peddling rhetoric about getting British firms exporting, but the ONS data show that any increase in product exports is not happening fast enough.
We can only hope that the figures improve next quarter. We’ll keep you posted.