Record rise in UK exports helps to reduce trade deficit

Imports and Exports | | MIC Customs Solutions |

A record rise in UK exports during April 2016 helped the country to cut its trade deficit.

The UK was able to reduce its trade deficit by a greater margin than expected during April 2016, thanks to a record rise in exports.

Overall, goods export volumes increased by 11.2 per cent in April, marking the single biggest monthly rise since records began in 1998. This brought the overall value of exports during the month to £26.12 billion (€32.83 billion), which was close to the all-time high water mark set in June 2013.

The Office for National Statistics credited stronger overseas demand for chemicals, oil, machinery and aircraft parts as key trends underpinning the improvement. Imports also increased during April by £2 billion to reach £36.6 billion in total.

As a result of this positive momentum, the country was able to reduce its trade deficit to £3.29 billion, down from £3.53 billion in March. This marks the lowest level seen since last September.

This news will be welcomed by the British government due to the drag on economic growth caused by the trade deficit during the first quarter of the year. It will also be taken as a positive in terms of the wider effort to achieve a target of £1 trillion generated from exports annually by 2020.

It comes at a time when many of the country's businesses are adopting a cautious stance due to the upcoming referendum on the UK's continued membership of the EU, which has made it difficult for companies to make predictions about future trading conditions.

Howard Archer, the chief economist at IHS Global Insight, said: "Along with the jump in industrial production in April and decent retail sales growth, the trade data suggests UK GDP growth could be holding up better in the second quarter than has been thought - despite the heightened uncertainty."