UK trade gap narrows to £6.2 billion

Date: April 13, 2010

Bolsom: “If the pound remains competitive and overseas demand continues to grow, sustained economic recovery looks even more certain”

The UK’s balance of trade narrowed more than forecast in February to £6.2 billion, the lowest gap since June 2006, it was announced today. Whilst the city roundly predicted the gap would narrow, most economists had predicted it would fall to £7.4 billion.

According to the Office of National Statistics, exports in February surged to 9.5%, whilst imports fell 0.7%. The pound rose 0.1% against most major currencies immediately after the release, rising to $1.5404 at 9.45am.

Mark Bolsom, Head of the UK Trading Desk at Travelex, the world’s largest non-bank FX Payments Specialist, said, “The pound was weak for much of February against its major counterparts and this drove our export growth forward. Domestic demand overseas seems to be improving too, which again supported British exports.

“The data will be great news for Bank of England policymakers who had strongly hoped that a weaker sterling would support economic recovery. Whilst we’re not out of the woods yet, if the pound remains competitive and overseas demand continues to grow, sustained economic recovery looks even more certain. Certainly, this should reassure investors that the UK is addressing its trade imbalances and it will boost support for the pound.”

Bolsom continues, “Looking forward to the release of our GDP figure, higher exports will continue to support our economic growth in Q1 and I expect to see sustained growth in the first quarter of 2010. Going forward, what will be interesting to see is whether this data is a tangible statistic for UK export-led businesses and whether they are actually feeling the benefits of a weaker pound.”

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Jessica Buttress
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About Travelex:
Founded in 1976, Travelex is the world’s largest non-bank foreign exchange and payments specialist; with operations across four continents and 6,000 employees worldwide.

Travelex holds key positions in its three main areas of activity: Global Business Payments (TGBP, which includes Travelex Personal Payments), Currency Services and Card and Mobile Payments. Every year, more than 35,000 corporate clients and 30 million customers trust Travelex to manage their foreign exchange requirements.

Recently recognised by TowerGroup research as Industry Leader for payments innovation for SMEs, Travelex currently handles international payments worth £40 billion annually for over 750 large corporate and financial institutions.

Visit www.travelexbusiness.com/uk for more information or email the press office at jessica.buttress@travelex.com