9th January 2015
Tumbling oil prices have helped the UK to push its trade gap to the lowest point since June 2013.
The trade gap is the difference between the value of goods and services exported by the UK to other parts of the world compared with those imported.
The Office of National Statistics said the UK’s goods and serves deficit was £1.4 billion in November, down from £2.2 billion the year before.
However, this fall did not reflect an increase in exports, but a fall in the value of imports. Imports dropped £1.1 billion, including a £0.7 billion fall in oil imports.
The cost of Brent crude oil has fallen by more than 50% since August due to oversupply but also increased domestic production in the US and a slowdown in demand in China.
While the UK’s good deficit was £8.8 billion, there was a £7.4 billion surplus in the supply of services.
David Kern, chief economist at the British Chambers of Commerce, said the numbers were welcome but that there was ‘no room for complacency’.
‘The UK faces a national challenge when it comes to trading the world. The Monetary Policy Committee must persevere with low interest rates for most of this year and we need to redouble our efforts to place exports at the heart of businesses’ growth strategy if we are to achieve the government’s export target and rebalance the economy,’ he said.