"Unless this situation changes radically, not only will we miss out on the target of increasing exports to 1 trillion by 2020, but we will also endanger the UK's long-term prospects"
- David Kern, British Chamber of Commerce's chief economist
Britain's trade deficit widened more than expected in September amid increasing oil imports and weak export growth to the European Union. The latest data from the Office for National Statistics revealed, the UK's trade gap widened to –9.4B from –9.0B in the preceding month. Exports in the reported month increased 4.2% from August, while imports rose 5.8%. Oil imports skyrocketed 27.6% in September, the ONS said. The overall shortfall for the third quarter appeared to be 7.549 billion pounds, compared with 6.461 billion pounds in the three months through June, suggesting the trade balance would be a drag on economic growth in the July-September period, the ONS said.
Last week the Bank of England left the monetary policy intact in November, keeping interest rates at ultra-low of 0.5% and the volume of asset purchases at 375 billion pounds. The U.K. recovery remains robust enough that some forecasters have revised their expectations for growth upwards. The European Commission said Britain will expand 3.1% this year and 2.7% in 2015, faster than it saw in May and a contrast to its downgrade to Euro zones forecasts. Nevertheless, so far strong dovish signals from the nine-member Monetary Policy Committee have indicated recently that the BoE's monetary policy is set to remain highly accommodative until at least spring of 2015.
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