The UK's trade deficit narrowed marginally in August in line with expectations but imports dropped more than exports in a sign domestic demand may be softening.
According to Office for National Statistics (ONS) figures released today, the country's deficit in goods and services dropped to £4.6bn in August from its five-year high of £5bn in July.
Despite the improvement in the net trade position, the fact imports fell far more than exports has raised fears domestic demand may be stalling. The volume of imports fell 1.5% whilst exports declined just 0.2%.
But with exports also declining, there is little indication the weak sterling is boosting demand for UK-produced goods.
The surplus on trade in services was £3.6bn in August, compared with a surplus of £3.7bn in July, whilst the deficit on goods narrowed to £8.2bn in August, compared with a deficit of £8.7bn in July.
The country's deficit with EU countries narrowed to £3.5bn in the month, compared to £4bn in July, whilst the gap with non-EU countries was broadly unchanged at £4.7bn.
Fidelity Multi Asset CIO's outlook
Willis Owen report
From 1 March
Fears ahead of end of QE
CEO of TeamBlockchain