Last week’s trade numbers showed a better Quarter 3 for UK exporters, while imports continued to decline. The total trade deficit in goods and services narrowed to GBP8.5bn in Q3 compared with GBP10.1bn in Q2. This is good news for UK businesses, providing the confidence needed to stimulate the economy.

The continued fall in exports to EU countries is still a worry, though not particularly surprising given the unrelenting problems being faced by Greece and Spain.  Exports to the EU still account for almost 50% of total UK goods exports, and economic data from Germany and France was poor last week.

BOTTOM LINE – UK trade deficit narrows on fall in imports, while exports to EU and non-EU countries continue to diverge, with euro area weakness likely to weigh on demand.  China continues to be the major growth area.