UK trade gap narrows

Following a sharp fall in imports into the UK, as the Office for National Statistics has announced, a visible trade gap can be seen, as the trade gap has fallen from £8.1bn in November to £7.4bn in December.

This is good news given the fact that analysts had previously predicted that the trade gap would actually increase in December, as there was an indication that the fall of the pound would actually lead to further growth.

However the fall in sterling did not do enough to aid faltering exports, however it did mean that imports have fallen sharply as the demand for foreign goods had all but vanished.

The deficit in trade for both goods and services has fallen by £0.4 billion to £3.6 billion in the same period.

Exports actually did rise to £19.7 billion in December, which is a rise of 0.5 percent whilst imports fell by 2.5 percent.

British car manufacturers have been the worst hit over the last three months of 2008 as exports fell by a whopping 20 per cent, whilst exports of energy and commodity-intensive activities fell by 7.5 per cent.

Consumer goods, apart from cars, faired best as they only fell by 5.5 per cent. With the reduction of the trade gap, this is a glimmer of hope for the domestic economy.

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