The high level of UK’s trade deficit prompted chancellor George Osborne to warn about a “dangerous cocktail” of economic risks which could turn 2016 into one of the toughest years since the financial crisis.While addressing a room of leaders at the Cardiff Business Club in January, Osborne said: “2015 was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats from around the world. For Britain, the only antidote is confronting complacency and delivering the plan we’ve set out.” Now, amidst claims that Britain struggled to improve its export performance due to the high performance of the pound, as well as concerns that the global economy is heading for a recession, the Office for National Statistics (ONS) may prove Osborne’s cautionary words to be true. It found that the UK’s trade deficit widened to £10.352bn from £8.575bn in the previous quarter – the biggest gap since the start of 2015. As such, it claimed trade would continue to drag on economic growth. Howard Archer, chief UK economist at IHS Global Insight, said: “UK exports have clearly struggled in recent months, as they have been hampered by the Sterling’s overall strength in 2015, particularly against the Euro, and moderate global demand. “This was evident in total exports of goods and services falling 0.8 per cent month on month in December and by 0.8 per cent quarter-on-quarter in the fourth quarter. Exports of traded goods excluding oil did grow 0.5 per cent month on month in December, but they were only flat over the fourth quarter.” Read more about exporting:
- How you can become an export pro in 2016
- Getting over the economic uncertainty of Brazil
- What are the risks exporting SMEs need to be considering?
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