Business leaders have demanded that boosting exports be made a “national economic priority” after official figures showed Britain’s trade deficit had narrowed but remains stubbornly high.
The data from the Office for National Statistics (ONS) showed the deficit fell to just over £3.2 billion in November from £3.5bn a month earlier.
Economists were divided as to the potential impact on Britain’s recovery prospects while the British Chambers of Commerce noted that the figure still pointed to a large deficit in the fourth quarter.
The membership group’s chief economist, David Kern, said: “Although there was a small fall in the trade deficit, these figures are disappointing.
“Boosting exports must be a national economic priority, particularly when it comes to diversifying towards faster-growing economies outside the EU.”
The UK economy staged an unexpectedly robust recovery last year, but it was driven mainly by domestic and consumer spending, frustrating government plans to get the economy more focused on exports.
Yesterday’s ONS report showed that the deficit in goods fell by £300 million to £9.7bn as a 2 per cent increase in exports outdid a smaller rise of 0.8 per cent in imports. It was balanced out by a surplus in services, which remained flat at £6.2bn.
Goods imports from the EU reached a record high of £19.2bn, attributed in part to an appetite for importing European-made cars. But demand from Europe for UK goods also rose.
Motor exports to the continent rose slightly on the month but car imports from the region climbed by £359m. It comes after figures earlier this week showed that new car sales both north and south of the Border raced to a six-year high in 2013. The deficit in goods in the three months to November was put at £29.2bn, some £1.8bn higher than the previous quarter.
Samuel Tombs of consultancy Capital Economics said Britain’s trade deficit remained huge.
“The trade figures have continued to pour cold water on hopes of an export-led recovery. And with little sign that a noteworthy recovery is emerging in the eurozone, exports look set to remain subdued in 2014,” he noted.
However, Carl Astorri, senior economic adviser to the EY Item Club, said: “The latest trade numbers were generally positive, with tentative signs that the UK recovery may be starting to broaden out into exports.
“Stronger demand from the eurozone has come as a welcome development. A sustained rise in demand from the bloc could provide a strong impetus to the UK economy.”
The figures came as the Bank of England held interest rates at their historic low of 0.5 per cent while leaving its quan- titative easing – or bond-buying – programme unchanged at £375bn.
Rates have been at that level since March 2009. But the strength of the economic revival in recent months has led to widespread speculation that the central bank will have to tweak its forward guidance to stave off a hike in borrowing costs.