- Ian McCafferty, BoE policy maker
The gap between the amount of British imports and exports narrowed to the lowest level in seven months in October, but weakness in trade remained a drag on the country's economic growth. According to the Office for National Statistics, the UK trade deficit in goods was 9.6 billion pounds in October, down from a revised 10.5 billion pound deficit in September. The narrowing of the difference between how much the UK purchases and sells abroad was due to a jump in exports, particularly a rise in silver exports, for which India was the top destination. At the same time, imports fell as Britain bought less oil from countries outside the European Union. This resulted in a much lower trade deficit with non-EU countries. Imports declined by 0.7 million pounds, with fuel imports dropping 0.9 billion pounds. The lack of a sustained improvement in the volume of exports raises concerns about the strength of the British recovery. Economic slowdown across the Euro zone countries, as well as a strong Pound, has been a drag on the British companies during the second half of the year. Thus, the UK economy remains highly dependent on domestic demand to support the current pace of economic expansion. In the meantime, the BoE's policy maker Ian McCafferty said the central bank should start raising rates sooner in order to ensure gradual tightening to help businesses and public adjust to more normal rate levels.
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