UK trade deficit narrows in July as exports rise, ONS reveals

The UK’s deficit in trade in goods narrowed in July as exports improved, according to the first release of official data on trade since the Brexit vote.

The total trade deficit was £4.5bn in July, compared to a deficit of £5.5bn in June, the Office for National Statistics revealed. Economists had expected a deficit of £4.2bn.

Total exports of goods and services rose 1.9% in July from a month ago, while imports dropped 0.5%.

“A major hope for the UK economy going forward is that the substantial overall weakening of the pound since the UK voted to leave the European Union in June’s referendum will increasingly feed through to boost foreign demand for UK goods and services,” said Howard Archer, chief European and UK economist at IHS Global Insight.

“While the pound has recently firmed from its post Brexit vote lows, it is still at an extremely competitive level and is likely to remain so for an extended period. Indeed, we believe that the pound could well soften further if current UK economic resilience falters over the coming months as we suspect it will.”