Britain's trade deficit grows with the economy, then, sterling road

Britain's trade balance with other countries continued to show significant increase in the deficit on the growth of the economy. According to a release issued on Thursday ONS, the overall trade deficit for July totaled 4.9 billion pounds, a billion more in comparison with the previous month. Is flirting with the dynamics and demonstrated the most closely tracked the trade deficit in goods. He reportedly made 8,7 billion in July compared with 7.5 billion in the preceding month. This pattern provided a noticeable increase in imports of goods (3.1% m / m) for some decline in exports (-0.9% m / m). And it is fairly stable trend overtaking the growth of imports compared to exports. From May to July was exported goods and services 11,5% more than during the same interval in the previous year. Measured the same way the import shows.
We previously often heard from representatives of the Bank of England about the need to maintain a low exchange rate of sterling. Recent data on trade should only support such a tone of his speeches. The growth of the trade deficit could be justified in times of strong growth economy, where consumption increased sharply due credit. Now the last factor is almost not working, so that data can only tell that the goods manufactured in Britain, expensive compared to imports, although the pound against the euro appreciation (+7% per year) and the U.S. dollar (+6%) and looks great. But now the pound should cost even less to support the restoration of production. Meanwhile, sterling sags at the tender for the forex on Thursday, having failed to gain a foothold for the progress yesterday, the level of 1.55, but the escalating growth of optimism due to strong performance in Asia and Oceania supports the consolidation of pound against the dollar, leaving it near its 200-day MA.

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