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UK exports dissapoint, GBP falls by 18% as economy limps to end of weak H1

Car production suffers biggest quarterly fall since 2011

Reuters  |  London 

Brexit
Representative image

Britain's put in a weak performance in June when declines in car manufacturing, construction and gave an uninspiring end to the weakest first half of any year since 2012.

A year after voted for Brexit, there is still little sign that exporters have gained much by way of competitiveness from the fall in the value of the pound after referendum.

The has said it is counting on a recovery in to help lift growth in the

"This is a disappointing set of data for a country that has recently seen an 18 per cent fall in the currency," said HSBC economist Elizabeth Martins.

Britain's goods jumped to a nine-month high of 12.7 billion pounds ($16.5 billion) in June from 11.3 billion pounds in May, exceeding all forecasts in a Reuters poll, and the figures also showed the growing importance of to the just as is preparing to leave the bloc.

The Office for National Statistics said nothing in Thursday's data pointed to a material change in its earlier estimate that the grew 0.3 per cent in the three months to June after expanding just 0.2 per cent in the first quarter.

Car production recorded its biggest quarterly fall since 2011 and construction declined by the most since 2012.

Rising has weighed on since the start of the year, and a separate survey on Thursday showed property valuers reported the weakest growth in in over four years.

Oil spike


A spike in in June helped ensure the headline measure of exceeded forecasts, growing by 0.5 per cent after flat-lining in May. But this reflected a lack of production interruptions in North Sea oilfields from seasonal maintenance, which is likely later in 2017 instead.

contracted 0.4 per cent on the quarter - in line with previous estimates - while construction declined by more than previously thought, driven 1.3 per cent lower by less public sector, commercial and repair work.

Forecasters at Britain's National Institute of Economic and Social Research (NIESR) estimated that the data showed GDP growth in the three months to July slowed to 0.2 per cent.

Thursday's trade data continued the sharp divergence between private-sector business surveys, where exporters have reported big increases in demand since last year's vote, and official figures which show much less of a pick-up.

Goods export volumes dropped by 4.9 per cent on the month in June, their biggest fall in a year. Looking at the second quarter, were 5.0 per cent higher than last year, but this was almost matched by a 4.8 per cent rise in imports.

The figures highlighted Britain's reliance on EU markets, at a time when talks are bogged down on preliminary issues and have yet to discuss trade, less than two years before existing arrangements are due to end.

The EU is the destination of more than half of Britain's goods exports, and over the past year these to the EU have grown almost twice as fast as those heading elsewhere.

"Safeguarding the favourable terms of trade that firms currently enjoy with partners and markets in and beyond must be a key priority," the British Chambers of Commerce's head of economics, Suren Thiru, said.

Much of the gain in reflected a stronger global economy, rather than a weaker currency - which raised manufacturers' costs for imported raw materials - and overall economic growth was likely to weaken, he added.

A Reuters poll on Thursday showed economists expected to grow by 0.3 per cent a quarter on average over the coming year, compared with 0.4 per cent in the EU countries that use the euro.

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