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Trade deficit tumbles as oil import costs slide

Oil Price

The Office for National Statistics has estimated that for the three months to January, the UK's trade deficit nearly halved from £8bn to £4.4bn, compared with the previous quarter. The slide has largely been attributed to the steep drop in oil prices which cut the cost of oil imports by £1.2bn in the first month of 2015. The deficit narrowed by £1.5bn from December to £616m in January, against forecasts for a £2.3bn shortfall, as import costs fell by £2.5bn against a £1bn decline in exports. The services sector continued to thrive, bolstering the trade balance with a record surplus of £7.8bn, but this was more than offset by an £8.4bn goods deficit, its lowest reading since March last year. The ONS also said that Britain's exporters are increasingly making their presence felt outside of the EU, with orders from other markets increasing by 7.3% during the three months to January, whilst there was also a drop in the number of imported goods from both EU and non-EU countries.

 

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