UK trade deficit points to ex­port drag in 4Q

The Pak Banker - - MARKETS/SPORTS -

LON­DON: Bri­tain's trade deficit widened in the fourth quar­ter as ex­ports fell, un­der­scor­ing the econ­omy's re­liance on do­mes­tic spend­ing. The value of im­ported goods and ser­vices out­stripped ex­ports by 10.3 bil­lion pounds com­pared with 8.6 bil­lion pounds in the third quar­ter, the Of­fice for Na­tional Sta­tis­tics said in Lon­don on Tues­day. In De­cem­ber alone, the deficit nar­rowed to 2.7 bil­lion pounds, with the short­fall in goods fall­ing to 9.9 bil­lion pounds. Both were nar­rower than econ­o­mists fore­cast. The fig­ures put a spot­light on Bri­tain's un­bal­anced econ­omy, which is be­ing driven by con­sumer spend­ing and the dom­i­nant ser­vices sec­tor as global tur­moil holds back ex­ports and man­u­fac­tur­ing. Bank of Eng­land of­fi­cials in­di­cated last week they are in no hurry to raise the bench­mark in­ter­est rate from a record-low 0.5 per­cent.

To­tal ex­ports fell 0.8 per­cent in the fourth quar­ter. In De­cem­ber alone, goods ex­ports de­clined 0.3 per­cent and im­ports dropped 4.8 per­cent. The value of oil im­ports fell 11 per­cent to 1.9 bil­lion pounds, the low­est level since Fe­bru­ary 2009, re­flect­ing fall­ing prices. Net trade knocked 1 per­cent­age point off growth in the third quar­ter and looks set to have been a drag again in the fourth.

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