Following a sharp widening of the trade deficit in the third quarter (Q3) of 2016, an increase in exports of goods to non-EU countries saw the deficit on goods and services narrow to £8.6 billion in the fourth quarter (Q4) (October to December).
This is the main finding of the latest trade bulletin produced by the Office for National Statistics (ONS).
It shows that, while exports of goods to both EU and non-EU countries increased through most of 2016, there was a much higher quarter-on-quarter growth in exports to non-EU countries in Q4.
The British Chambers of Commerce (BCC) welcomed the signs of improvement with Director of Economics Mike Spicer describing the figures as an important reminder that UK companies take advantage of trading opportunities in every part of the world.
“This performance comes despite the mixed reaction of exporters to the depreciation in Sterling – which our research has found is hurting as many as it is helping,” he went on.
With Brexit continuing to dominate the headlines, Mr Spicer suggested that the continued weakness of the pound and the expected slowdown in economic growth is likely to dampen future demand for consumer imports.
More direct support from the Government, including more investment in trade show access, is needed “to keep UK businesses trading with the world”, he argued.
The BCC wants to see action in the Budget to reduce the upfront costs of doing business, particularly business rates in order that businesses have the resources to invest in people and product development.
“This is absolutely necessary to take full advantage of the growth opportunities in overseas markets,” Mr Spicer concluded.
