UK trade gap stays steady in May

The value of oil imports is increasing as crude prices hit record highs

The UK's deficit on trade in goods with the rest of the world in May remained unchanged from April, the Office for National Statistics said.

Britain's goods trade gap, the difference between what the UK imports and exports, stood at £7.5bn, exactly the same as the previous month.

The May deficit on trade in goods and services stood at £4.2bn, compared with a revised £4.1bn in April.

The monthly trade surplus in services was £3.2bn, down from £3.5bn in April.

There were rises in exports of oil, chemicals and semi-manufactured goods, but exports of cars were lower.

There was an increase in imports of oil, capital goods and basic materials.

The oil balance was in deficit by £400m in May, wider than the £300m recorded in April.

Future improvements?

Export and import prices were both 2% higher than in April as manufacturers worldwide are forced to raise their prices because of increasing costs.

But some analysts consider that the business and consumer downturn will see less demand for imports, while exports could get a boost if the pound declines against other major currencies.

"We expect to see an improvement in the trade deficit over the next six months," said David Page, an economist at Investec.

But he added: "There is little evidence of that today."