Widening trade deficit ‘unsurprising’
FIGURES released by the Office for National Statistics show the UK’s trade deficit on goods rose to £9.2bn in December.
For the year as a whole, the UK’s deficit on trade in goods increased by £97.2bn in 2010, compared with a deficit of £82.4bn in 2009.
The data disappointed policy makers in Government, the Bank of England and City economists but John Ashcroft, chief executive of professional services group Pro Manchester, described the statistics as unsurprising.
He said: “For readers of the Pro Manchester economics analysis, the figures will come as no surprise.”
“I have been saying for some time that the trade deficit will continue to grow as the economy starts to recover. Exports have a high level of import dependency and a lower value for sterling merely pushes up the cost of manufacturing with little impetus to volume.
“The main contribution to export growth is the high growth in world trade. Despite this, the deficit will continue to deteriorate, there will be no rebalancing of the economy.”
Pro Manchester is hosting the inaugural Business and Professional Services Conference at The Point next month and prospects for the British economy will be on the agenda.
Mr Ashcroft added: “We will be focusing on this as well as wider business and financial issues at our conference next month, and will hear from industry experts on what we can expect as we work towards economic recovery.”
