Improvement in trade figures

THE UK trade deficit shrank to £1.5bn in July.

The figure was a significant fall from £4.3bn in June and an improvement on the £2.4bn deficit recorded in the same month last year.

There was a deficit of £7.1bn on goods, partly offset by a surplus of £5.6bn on services.

David Kern, chief economist at the British Chambers of Commerce, said: “We know that British exporters are facing major challenges due to problems in the eurozone and the global economy as a whole, so progress towards rebalancing will be slow and painful.

“However, the latest trade figures show encouraging progress, and reinforce our hope that the UK economy will return to positive growth in the third quarter of 2012. UK exports to non-EU countries were slightly higher than exports to the EU in the last three months, which shows a shift in the traditional pattern where exports to the EU are usually much stronger.

“These developments show that British exporters are making the right decisions and moving to faster-growing areas outside the EU.”