Increase in UK trade deficit as expected boost from weaker pound fails to materialize

Biggest trade gap in 11 months is mixed news for economy

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The UK’s trading deficit with the rest of the world grew in August, as the projected lift from a declining value in the pound failed to appear.

According to the office for national statistics (ONS), the trade deficit grew from £4.2bn in July to £5.6bn in August. It is the biggest gap between imports and exports in 11 months.

The figures provide grim reading for government ministers looking to expand trading relationships outside the European Union.

According to the ONS figures however an increase in manufacturing and construction activity offer a positive sign for the economy. Factories increased production output by 0.4% on the previous month, while construction firms increased output by 0.3% over the same period.

ONS senior statistician Kate Davies said: “This latest set of key economic indicators presents a mixed picture with signs of improvement in UK manufacturing, offset by the continuing sluggishness of the construction sector and a widening of the underlying trade deficit in recent months.”

Originally posted 2017-10-10 20:22:40.