UK’s trade deficit narrows as exports jump to 3-year high

The United Kingdom witnessed a drop in its trade deficit for the month of April as exports surged to a record 3-year level, signaling that recent weakness in trade performance may fall in the forthcoming months. 

Britain’s total trade deficit narrowed to 3.294 billion pounds in April from a downwardly revised 3.532 billion pounds in March, its lowest level since September 2015, data released by the Office for National Statistics showed Thursday.

Britain’s large current account deficit hit a record 7.0 percent of the economy in late 2015, which the Bank of England has said potentially leaves Britain vulnerable if the country votes to leave the European Union in a referendum on June 23, the report said.

Goods export volumes jumped 11.2 percent on the month, the biggest rise since records started in 1998, taking the total value of goods exports in April to 26.123 billion pounds, not far from an all-time high set in June 2013. British economic growth slowed to a quarterly rate of 0.4 percent in the first three months of 2016, down from 0.6 percent in the last three months of 2015, with Britain’s trade deficit accounting for an increased drag.

Further, this may give impetus to those who are advocating a departure from the European Union on June 23, as they show the UK remains an important market for EU exporters but non-EU countries are increasingly important for British exporters.

Meanwhile, goods imports volumes rose by 4.6 percent after a 0.9 percent increase in the first quarter.