The trade figures for July underline the folly of those who rushed to draw conclusions from the Jubilee-affected June numbers. The overall trade deficit narrowed sharply from £4.3 billion in June to £1.5 billion in July, while the goods deficit fell from £10.1 billion to £7.1 billion.
In July alone, the value of exports rose by 9.3%, while imports fell by 2.1%, proof that the June distortion hit exports significantly. Of course, no conclusions can be drawn from monthly movements between June and July.
A better guide is the three monthly picture, which shows that the overall trade deficit narrowed to £8 billion in the May-July period from £10.5 billion in the previous three months. Export volumes rose by 0.9%, excluding oil and erratics, while import volumes fell by 0.8%. There's a long way to go, but at least it is in the right direction.
The figures continue to show that exporters are being hit by the eurozone crisis, while making progress in non-EU trade. In the latest three months goods exports to the rest of the EU edged up by 0.3% but were down by 4.4% on a year earlier. Non-EU exports rose by 4.5% and were 12.5% on a year earlier. More here.