The UK trade deficit was largely unchanged during March, with a total deficit of GBP 8.6 billion compared to a revised GBP 8.6 billion last month, according to the Office for National Statistics. However, expectations were for a narrowing in the gap to – GBP 8.4 billion.
The data highlight the effect the euro zone debt issues are having on the UK economy with regards to trade and exports for the UK to the euro zone. In fact, the data show that there was a rebound in exports to countries outside the European Union by a record number.
The goods trade deficit with non-EU countries fell more to GBP 4.11 billion from GBP 4.87 billion in February and against forecasts for a gap of GBP 4.65 billion.
Export growth was driven by sales of pharmaceuticals and cars to non-EU countries such as the United States and China helping to make up for shortfalls elsewhere. Overall import values also grew to a record level in March.
The whole picture shows that the rebalancing of the UK economy towards exports remains some distance away.
Sterling fell against the dollar after the data to 1.6062 from 1.6095.