In response to the official trade figures, showing a narrowing of the trade deficit from September to October, Allie Renison, Head of Europe and Trade Policy, said:
“It’s clear that UK exports are starting to perform better, with a 4.6% increase from September to October. The 8.7% spike in goods exports indicates that the fall in sterling may be starting to passing through to manufacturers selling in overseas markets.
This is welcome news, particularly in light of the ONS’ massive correction to recent trade data that revealed that, between the second and third quarters, the period immediately following the referendum, the trade deficit widened significantly. Although it should be noted that monthly data is often volatile and therefore it is not yet clear whether the boost to exports from sterling’s depreciation is a sustained trend.
Despite a jump in imports in the 3 months to September, there appears to have been a drop in the month that followed. It is important to monitor the health of imports just as much as exports. The former play a crucial role in the assembly of goods in the UK, as well as reflecting robust domestic demand, so we should be cautious about celebrating any sustained drop in import levels.”