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By Jamie Satchithanantham
LONDON (MNI) - Between April and May the UK's total trade deficit widened
to stg3.1bn, courtesy of a 2.7% m/m rise in imports (primarily goods). The
deficit stood at stg2.1bn in April and stg3.7bn in March.
True to this up-and-down sequence, analysts expect the deficit to have
narrowed in June, down to stg2.5bn. The trade in goods deficit is also expected
to narrow to stg11.2bn in June.
Trade balance Trade
stg bn stg bn
Date Out 10-Aug 10-Aug
Median -2.5 -11.2
Bloomberg Consensus -2.4 -11.0
Forecast High -2.1 -10.5
Forecast Low -2.9 -11.5
Standard Deviation 0.3 0.4
Count 6 5
Prior -3.1 -11.9
Barclays -2.9 N/A
Capital Economics -2.4 -11.2
Investec -2.1 -10.7
Lloyds TSB -2.5 -10.5
Nomura N/A -11.2
Oxford Economics -2.7 -11.5
Standard Chartered -2.5 N/A
Since the vote to leave the European Union last year and the associated
slide in sterling exports have, in line with expectations, fared well. Absent,
however, has been any material slowing in import flows, thus keeping the trade
deficit largely in tact.
Core export volumes were up 7.2% 3m y/y in May, the highest since late
2015, while core import volumes have also held up well, up 6.3% 3m y/y.
With greater evidence -- further erosion of UK real wage growth, falling
consumer confidence, a softer housing market activity and reduced demand for
cars -- pointing towards households reigning in consumption, we could see import
volumes finally start to edge materially lower in June.
Alongside this, amid stronger global conditions, primarily with Europe (the
UK's biggest trading partner) in much better shape, there is scope for export
growth to grow further and for the balance of trade to improve.
--MNI London Bureau; tel: +44 203-586-2225; email: firstname.lastname@example.org