The UK trade deficit fell to a better-than-expected 7.4 billion pounds in June, according to the Office for National Statistics (ONS). The report, released on Tuesday, showed exports hit a two year high, in response to a weaker pound and a stronger eurozone economy.
The analysts had forecasted the June deficit at 7.8 billion pounds, according to a Dow Jones Newswires survey.
“The narrowing in the trade deficit was driven by a solid rise in exports,” said Capital Economics analyst Vicky Redwood.
“That said, it’s hard to get too excited. The narrowing did little more than reverse May’s sharp widening in the deficit and the more forward-looking survey measures of export fell again in July.
Redwood added: “Accordingly, we continue to doubt that any trade boost will be big enough in the near term to offset the effects of the severe fiscal squeeze on consumers and the domestic economy.”
The ONS also reported, exports rose 4.3 per cent in June to 22.4 billion pounds; the highest level since July of 2008.
In relation to countries being exported to, non-European countries hit their highest level since 1998, and the highest level was reached to the U.S. since 1988.
Imports also gained ground, increasing 1.0 per cent, to reach 29.8 billion pounds.
With the recent strength of the German economy, exports from the neighboring country hit almost record levels. June saw exports 28.5 per cent higher from this time last year to 86.5 billion euros. This was a 44 per cent increase from May.
On Friday, second quarter data will be released for Germany, as analysts believe the numbers will surely be positive.