Trade Deficit Narrows To £2.1bn

The deficit in the UK trade figures narrowed by £0.1bn from £2.2bn in January to £2.1bn in February. The deficit of £9.1bn in trade in goods was partially offset by the trade surplus in trade in services of £7bn. The trade balance reflects the exports minus imports position. The statistical bulletin from the ONS also advises data users to refer to the three monthly figures because of imports of erratic commodities such as ships, aircraft, precious stones and silver skewing the trade statistics and because trade statistics for a month can be misleading.

The impact can be seen in the three months to February which saw exports of goods decrease to £72.7bn (2.5%) due to falls across a range of commodities. Imports fell by 4.7% to £99bn over the same period due to a decrease in semi-manufactures and fuel. The estimated trade in services was £7bn with exports of £17bn and imports of £10bn. The three months to February saw an estimated surplus of £21.4bn in trade in services.

First Quarter Balance Of Payments £15.5bn Deficit

The UK current account deficit increased to £14.5bn in the first quarter of 2013 from £13.6bn in Q4 2012 according to a statistical bulletin from the ONS. The Q1 deficit equals 3.6% of GDP. The trade deficit improved to £6.1bn in Q1 2013 from £8.3bn in Q4 2012.

The monthly analysis shows that income balance fell to -£2.1bn from a surplus of £1bn which had the effect of increasing net borrowing from £12.7bn to £13.9bn. A decrease in the deficits of trade in goods and services of £2.1bn and in current transfers of £0.2bn partially offset the increase.

The UK was a net borrower of £55.4bn in 2012 from £18.5bn in 2011 mainly due to the income surplus of £22.5bn in 2011 becoming a deficit of £2.3bn in 2012 mainly due to a decrease in direct investment income surplus.

Trade in goods was -£26.5bn from -£28bn in the previous quarter. Exports rose by £0.9bn while imports fell by £0.5bn. Trade in services was £20.4bn in surplus up £0.7bn on the previous quarter. Exports increased to £49.4bn while imports increased by £0.3bn to £29bn.

Transfers were £6.2bn in deficit in Q1 2013, a decrease of £0.2bn.

The capital account was £0.6bn in surplus in Q1 2013 down £0.3bnn from the previous quarter. Inward investment was £10.2bn. The UK currnet account deficit £59.2bn.

European Current Account 21.8bn Euro Surplus

The latest EU balance of payments figures published by Eurostat show that the EU27 recorded a current account surplus of 21.8bn euro in Q1 of 2013. In the first quarter of 2012 there was a deficit of 7.7bn.

The 32.8bn euro deficit on goods in Q1 2012 became a surplus of 0.8bn euro in Q1 2013. The surplus on services fell from 31.2bn euro to 29.8bn euro.

Euro Area Trade In Goods In Surplus

The euro area trade in goods balance with the rest of the world for October this year shows a surplus of 10.2bn euros compared with October last year and 9.5bn euros surplus with September. Exports fell by 1.4% in October but imports grew by 0.6%. The EU27 however showed a deficit of 9.4bn euros compared with a deficit of 11.3bn euros in October 2011. The deficit in September was 12.5bn euros. Exports fell by 1.7% while imports rose by 0.3% in October compared with September.

Current Account Deficit Down From Last Quarter

The current account deficit has come down from £10.5bn in Q3 to £8.5bn in Q4 2011. The trade deficit is also down from £8.8bn in Q3 to £7.1bn in Q4 2011 and the income surplus increased by £0.6bn to £4.6bn according to a balance of payments statistical bulletin from the ONS. The current account deficit for the whole of 2011 was £29bn.

UK Trade Deficit £2.6bn

The UK seasonally adjusted trade deficit in goods and services in November was £2.6bn compared with £1.9bn for October 2011. Trade in goods was £8.6bn in deficit but the surplus on trade in services was £6.1bn. The volume of exports was down 1.7% and the volume of imports was up 1.1%. The prices of both exports and imports of goods fell by 0.4% and 0.2% respectively.

Euro Trade Surplus EU27 Deficit With Rest Of The World

Euro area trade with the rest of the world in October 2011 recorded a surplus of 1.1 bn euros, compared with 3.1 bn euros in October 2010. In October 2011 compared with September 2011, exports fell by 1.9% and imports by 0.7%.

The EU27 trade balance with the rest of the world showed a 11.0 bn euro deficit, compared with a 9.6 bn deficit in October 2010. In September 2011 the balance was -10.6 bn euros compared with -13.9 bn euros in September 2010. In October compared with September 2011, exports decreased by 0.7%, while imports increased by 0.5% (from Eurostat).

Current Account Deficit Reduced To £2bn

The ONS recently published the latest balance of payments data for the UK. The current account deficit in Q2 2011 was £2bn down from £4.1bn in Q1. The total trade deficit increased from £5.8bn in Q1 to £6.8bn in Q2 2011. The UK recorded net international investment liabilities of £115bn.

The capital account showed a surplus of £1bn, up £0.3bn from Q1. The current transfers deficit decreased to £4.8bn, a fall of £0.9bn, due mainly to lower payments by the government. Payments to EU contributions can be erratic.

The trade in goods deficit increased to £24.6bn in Q2 2011 from £22.8bn in Q1. Exports fell by £1.2bn while imports increased by £0.6bn to a record £98.4bn. Trade in services also saw a new record in Q2. The surplus on trade in services grew to £17.8bn. Exports grew by £1.5bn to another record £46.1bn.

There was a net outflow of £9bn compared with a net outflow of £3.5bn in the previous quarter. Overseas investment fell to £42.7bn from £160.1bn and investment flowing into the UK in Q2 was £33.8bn down from £156.6bn in Q1.

Increase In UK Trade But Deficit Goes Up

The UK trade balance deficit increased from £3.1bn in April to £4.1bn in May due to a larger increase in imports than exports which also increased in May. The deficit on trade in goods was £8.5bn in May compared with £7.6bn in April and the surplus on trade in services was £4.4bn in May compared with £4.5bn in the previous month. Both the volume of exports and the volume of imports increased in May. Export volume increased by 1.9% and import volume by 6%. Prices of exports fell by 1.7% and the prices of imports fell by 0.4% which meant a decrease in the terms of trade.

Surplus In Services But Trade Deficit Increases

The latest UK trade figures from the ONS show that in March 2011 there was a deficit on the value of trade in goods and services of £3bn compared with a £2.7bn deficit in February. Trade in goods showed a deficit of £7.7bn compared with £7bn in February. The surplus on trade in services was given as £4.7bn in March up from £4.3bn in February. The volume of exports in March was 3.4% down and imports 0.4% down on February. The price of exports rose by 1.1% and imports by 1.8% compared with February. Exports of services went up by £0.2bn to £13.8bn in March 2011 compared with February but imports fell by £0.2bn to £9.2bn. Over the year to March the trade surplus in services increased by £0.8bn to £12.9bn compared with £12.1bn in the previous quarter (Q4 2010). Total exports rose to £41bn but imports fell to £28.1bn.

UK Trade Takes A Dip In December

The seasomally adjusted deficit for UK trade increased in December 2010 from November's deficit of £3.9bn to £4.8bn. The deficit in goods was £9.2bn an increase of £0.7bn from the £8.5bn deficit in November. Services was in surplus again at £4.4bn down slightly from the £4.5bn reported in November.

The volume of exports was 1.3% lower in December and the volume of imports was 1.4% higher than in November. Both import and export prices rose in December. Exports rose by 1.1% and imports by 1.5%.

Services Trade Surplus Steady

In September UK deficit on trade in goods and services was £4.6bn compared with £4.9bn in August. Trade in goods deficit was £8.2bn and the trade in services surplus was £3.7bn unchanged from August.

Better Picture For Trade In August

The UK deficit on trade in goods and services decreased in August from £5bn in July to £4.6bn. Trade in goods was in deficit by £8.2bn but trade in services was again in surplus by £3.6bn down from £3.7bn in July. Geographically, the £8.2bn deficit on trade in goods with the world was spread between the EU with a £3.5bn deficit and non-EU with a £4.7bn deficit.

Reduction In Services Trade Surplus

The UK current account deficit on the balance of payments was £7.4bn for the second quarter of 2010 or -2% of GDP. The revised deficit for Q1 2010 was £11.3bn or -3.1% GDP. There was a deficit of £9.3bn with the EU compared with £11.2bn in Q1.

The deficit reduction was mainly due to an increase in the income surplus, partly offset by an increase in the trade in goods deficit and a reduction in the surplus on trade in services.

Euro Area 6.7bn External Trade Surplus

The euro area (EU16) had an estimated 6.7bn euro trade balance with the rest of the world in July 2010 compared with a 11.9bn euro surplus in July 2009 and a 2.2bn euro surplus in June 2010. Exports fell by 0.6% and imports by 1.5% between June and July.

In July 2010 the EU27 reported an estimated 5.7bn euro trade deficit compared with a 0.5bn euro surplus in July 2009 and a 9.7bn euro deficit in June 2010. The June 2009 extra-EU27 trade deficit was estimated at 4.1bn euros. Exports increased by 0.3% between June and July 2010 but imports fell by 1.1%.

Trade Deficit Of £4.9bn In July

The total trade balance for the UK in July showed a deficit of £4.9bn compared with £3.9bn in June. Trade in goods deficit was £8.7bn and the trade in services surplus was £3.8bn compared with £7.5bn and £3.6bn in June respectively.

The volume of exports was 0.3% lower and the volume of imports was 2.5% higher in July compared with June of this year (excluding oil and erratic items).

The deficit of £8.7bn in trade in goods was shared between the EU with a defeicit of £3.9bn and the rest of the world with a deficit of £4.8bn.

Euro Area Trade Surplus Down On Year

The euro area had a trade surplus of 1.8bn euros with the rest of the world in April 2010 compared with a 2.6bn euro surplus in April 2009. Exports fell by 2.4% in April 2010 against March 2010 and imports fell by 3.5%. The first estimates for the EU27 report a 10.2bn euro trade deficit on an annual basis. On a monthly basis there was a deficit of 7.2bn euros. Imports fell by 2.8% and exports by 2.4%.

The figures for January to March 2010 show that the EU27 deficit for energy rose by 66.6bn euros but the surplus for manufactured goods rose by 35.9bn euros. EU27 exports to all of its major trading partners grew in January-March 2010 especially to China (+48%), Brazil (+43%) and Turkey (+41%). The biggest increase in imports was to Russia with 35%.

The EU27 trade surplus with the US increased by 14.2bn euros. The trade deficit with China decreased from 37bn euros to 34.6bn euros but increased with Russia from 10.5bn euros to 18.2bn euros. The largest total trade deficit was the UK with 24.9bn euros.

Deficit In Trade In April Up £0.1bn

The UK still has a deficit on trade in goods and services. In April the deficit was £3.3bn compared with £3.2bn in March. The deficit on trade in goods was £7.3bn but services still reported a surplus of £4bn compared with £4.1bn in March. Total exports of services fell by £0.1bn to £13.4bn and imports of services fell to £9.4bn.

Comparing April with March 2010 the main contributors to the difference were an increase of £171m from the export of cars, £130m from the export of chemicals and £125m from the export of consumer goods. There were decreases of £194m in intermediate goods and £201m in the export of aircraft. Sectors that made a significant difference on the import side were ships with an increase in value of £225m and £249m from the import of oil. Offsetting these were a decrease in the import semi-manufactured goods (other than chemicals) to the value of £392m and a decrease to the value of £159m from the import of consumer goods (other than cars).

The deficit on trade in goods with the EU increased slightly in April by £0.1bn to £3.3bn . Over the three months to April the deficit was £1.2bn smaller at £9.4bn. EU exports increased by £1.3bn to £34.4bn and EU imports by £0.1bn to £43.9bn.

As export prices fell by 0.2% and import prices increased by 0.2% in April compared with March, there was a decrease in the terms of trade. If oil is excluded, export prices fell by 1% and import prices fell by 0.2%. Over the quarter, there was a decrease in the terms of trade as export prices increased by 3.3% and import prices increased by 3.6%. Expoprt prices increased by 2.5% and import prices by 2.8% if the oil price effect is excluded. The balance of trade in oil in April was a deficit of £0.4bn. Oil exports were £2.7bn and imports £3.1bn. Over the quarter the balance of trade in oil was in deficit by £0.7bn. There was an increase in value of £0.6bn in exports to £7.9bn and an increase of £0.7bn in imports to £8.6bn.

Perspectives On The Coalition's Programme

The Conservative/Liberal Democrat coalition recently set out it's programme for government in the Queen's Speech during the State Opening of Parliament. There were a number of responses to the Queen's Speech from industry.

The CBI agreed with the Coalition putting deficit reduction and securing economic growth at the heart of it's programme. The CBI called the speech ambitious and far reaching and said the Government has a sense of responsibility. They welcomed the NICs measures because the economy should be encouraged to create jobs, they were encouraged by the tax and benefits proposals and the reforms affecting the responsibilities of the Bank of England. The creation of an Office for Budget Resposibility (OBR) was welcomed as something the like of which they have been calling for some time to add some transparency and credibility. On planning they say that a new major renewal of infrastructure is needed but that the Government had some innovative ideas that may help local authorities accept new developments. They welcomed the Government's commitment to the climate change agenda and that emissions reductions targets could be reached if consumers and business improve energy efficiency. They support the Goverment's plan to increase and improve the diversity of education providers to help with failing schools and to give young people the knowledge and skills they need to be successful and they also support the idea of creating a single welfare-to-work programme tailoring to unique needs. The CBI believes the Government should give more scope in innovation and efficiency to the re-engineering of the health service and other public services without affecting the quality of services and that private sector providers deliver high-quality services within the NHS.

The FSB welcomes the plan to safeguard jobs, support the economy, simplify the tax system and the reversal of the NICs plan. It also welcomes the plan to support high-speed broadband Internet connections as more than half of small businesses rely on the Internet for up to 50% of their business. It would help, in particular, small firms in rural areas. The FSB will be looking into the proposals to introduce more flexible working. It also welcomes the proposals for a universal postal system.

The NFU saw the speech as a 'cuts' agenda containing numerous Bills aimed at facilitating the £6bn of cuts necessary to cut the budget deficit and restore economic growth. They noted a lack of Bills relating to agriculture and the food industry and the fact that Defra was not given any primary legislation to pilot for the next 18 months. The NFU were interested in proposals to reduce the number of quangos and whether they will affect Defra in any way. Also of interest were the green energy proposals for energy efficiency in homes and businesses. The proposed Decentralisation and Localism Bill is central to the drive to devolve greater powers to councils and local communities over planning. Regional Development Agencies may be replaced with Local Economic Partnerships if the propoals are successful. NICs proposals for employees may still go ahead even if the plans for employers and reversed. The NFU were also interested in the proposed commitment to hold a referendum if there are any more EU Treaty measures that directly affect UK sovereignty. Non-primary legislation of interest included the high-speed Internet connections proposals as it will include consideration of increasing availablity of broadband in rural areas. The NFU also noted the absence of proposals for flood provision and sharing the cost and responsibility for animal health.

The CLA welcomed the proposed Energy Bill saying it is a chance to improve energy efficiency. They warned that the proposed Decentralisation and Localism Bill could create more red tape around gaining planning permission. The CLA insists that rural businesses should not be left behind in the roll-out of high-speed broadband connections.

The TUC said that the Speech contained some important issues they could welcome like restoring the state pension link with earnings, cracking down on high-risk activities in the City and an the plans for green energy. They saw possible positive changes in extending flexible working rights to all employees and action to close the pay gap. However, plans to end initiatives to get young people into work, the abolishing of key public bodies and the resulting public sector job losses could only worsen the economic situation. They also emphasised that the focus on reducing the deficit is a mistake. The focus should have been on restoring growth and reducing unemployment.

The Cabinet Office has also announced that there will be an emergency Budget on 22 June that will set out a comprehensive and credible plan to eliminate the deficit over the course of the Parliament. The independent Office for Budget Responsibility has been created for best practice in fiscal transparency.

EU External Trade In March

The euro area trade balance first estimate gave a 4.5bn euro surplus with the rest of the world in March 2010. It was 1.6bn euros in March 2009 and 2.4bn in February 2010, revised from 2.6bn euros. The EU27 had an estimated 7.1bn euro deficit in March 2010 compared with -9.2bn euros deficit in March 2009. The deficit was 6.5bn euros in February 2010, revised from 6bn euros, compared with -10.8bn in February 2009.

The euro area consists of the 16 members states that have adopted the euro as their currency.