Cheaper oil takes trade deficit to lowest level for over 14 years
The UK’s trade deficit has dropped to its lowest level since 2000, official figures show.
The UK imported £600m more than it exported in January, according to data released yesterday by the Office for National Statistics (ONS).
It compares to the £2.1bn trade deficit in December. Around half of this fall was due to a drop in the value of oil imports, the ONS said. In addition, there was drop in imports of main commodities from Europe.
In the three months to January, the trade in goods deficit narrowed by £2.6bn to £27.7bn.
Part of that has also been due to a £1.5bn boost in exports.
“Though cheaper oil prices undoubtedly help a net oil importer like Britain – they could cut the 2015 deficit relative to 2014 by perhaps £5bn – non-oil trade accounts for the majority of the deficit decline in recent months as the UK has benefited from an upturn in the Eurozone and especially in North America,” said economist Rob Wood from Berenberg Bank.
In annual terms, the surplus on trade in services widened by £8.5bn between 2013 and 2014 thanks to an increase in exports of insurance and other business services.