Commenting for the IoD, Allie Renison, Head of Europe and Trade Policy, said:
“While first impressions are indeed worrying, it should be pointed out that that the widening gap is down to a rise in imports, which grew by 1.7% and are a sign of robust domestic demand”.
“Contrary to expectations that the appreciation in sterling would lead to a reduction in the export of goods, there has been an increase of 0.6%. Indeed, when compared with the previous three months, export prices decreased by 0.8% for the three months ending in May. Data from this period also show an increase in the export of goods to the EU by 1.7%, with the trade deficit narrowing for this period by £1.7 billion, compared to the previous three months. Meanwhile, exports to non-EU countries grew from April to May by 1.5%.
“Perhaps more alarming is the drop in the UK’s trade surplus in services, which fell from £7.1 billion in March to £6.8 billion in May, although this is likely down to imports returning to higher levels. However, there is no room for complacency, and the Government is right to continue making export-led growth a priority.”
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