Oil exports boost Britain's May trade figures

Jul 10 2009 by Nevill Boyd Maunsell, Birmingham Post

A surge in oil exports in May, when imports of all kinds fell by more than £1 billion, gave Britain the best monthly trade numbers for three years.

The shortfall from trade in both goods and services narrowed to £2.2 billion in May from £3 billion in April, according to the Office of National Statistics.

The deficit in goods came back sharply to £6.3 billion from £7.1 billion.

Within that, exports of oil jumped by 23 per cent to £1.24 billion, while imports slipped slightly. That resulted in a £188 million surplus in trade in oil, after a £161 million deficit in April.

There was also a £499 million improvement in trade in so-called erratic items, such as ships, aircraft and precious stones.

Leaving aside these special factors, exports and imports of goods both fell by four per cent in volume – but export prices rose by 0.5 per cent, while import prices fell by a similar amount.

Meantime trade in services yielded a £4.1 billion surplus, as in April.

Howard Archer, chief UK and European economist at UHS Global Insight, welcomed the improvement, but added: “It is still somewhat disappointing to see that exports of goods other than oil contracted again in May, (by 2.7 per cent month-on-month).

“This suggests that ongoing contracting domestic demand in overseas markets is still more than outweighing the boost to UK exporters coming from the more competitive pound.”