Exports up. Imports down. Osborne exonerated?

The trade gap has shrunk by a quarter over a single month, the largest decrease for a decade. Is the Chancellor's economic reshuffling working?

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013

Our trade economy has been steadily overheating. Import spend outweighed our income for far too long: the trade gap hit a record £10.2bn in September. The situation seemed irreparable: no one wanted to buy our wares. Until last month, apparently. New figures from the Office for National Statistics (ONS) show that our exports are suddenly skyrocketing, up by more than £2bn in October to £26.5bn. Plus, we’ve shaved a few mill off our import bill: from £34.6bn down to £34.1bn. 

This has done wonders for our yawning trade gap, narrowing the chasm by £2.6bn, and bringing the current total to £7.6bn, the largest percentage drop since 1998 when records began.

This is far more than market analysts dared hope for. They predicted a slight decrease, but only to around £9.4bn. In fact, we actually managed a trade surplus in our financial services industry last month: our banking and insurance sectors pulled in more than £6bn. George Osborne must be kissing his calculator with pride.

Fuel and raw materials are still hella expensive, however. In November, the cost of stock and energy was up 13.4% on the same period in 2010. But it’s still an improvement on earlier in the year when the figure hit 14.3%.

We’re definitely not out of the woods yet. Osborne himself has warned that our faltering manufacturing sector could hamstring the economy. But with demand across other sectors clearly rising, there’s hope for us yet…

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