UK trade gap stuck at £4.6bn
The UK trade deficit failed to narrow today after official data for May put the gap with the rest of the world at £4.6bn (€6.9bn).
The figure is broadly in line with the previous month but below expectations among City analysts, who had forecast a deficit of around £4.3bn (€6.4bn).
Strong domestic demand has fuelled the gap in recent months, with the figure reaching £5.6 billion in January.
The UK Centre for Economics and Business Research said the trade deficit remained a “potential Achilles heel” for the UK economy.
But it added: “It will take a considerably worse monthly trade figure than this to worry the Bank of England and the markets.”
Experts believe the position should start to improve as manufacturing exports pick up and demand for consumer goods begins to cool.
The breakdown of today’s data puts the trade gap with both the EU and non-EU countries at £2.3bn (€3.4bn) – broadly similar to a month earlier.
The surplus on trade in services was £300m (€448.7m) lower at £1.2bn (€1.8bn) , meaning the total UK deficit was £3.4bn (€5bn).
