UK Trade Balance - Economic Data Preview

The UK [B]Trade Balance[/B] is expected to narrow to 2.4 billion pounds in April from 2.5 billion in the previous month. Considering export volumes have been trending sharply lower, down 9.7% to date since peaking in July last year as the global economic downturn crushed overseas sales, it stands to reason that absent a recovery in foreign demand (an unlikely scenario considering the UK’s top trading partners are mired in deep recession) any improvement in the headline figure would come from lackluster import readings. This speaks directly to the current spending client, revealing that consumers remain on the defensive despite a stronger Pound that would have made foreign-made goods comparatively cheaper. As with most advanced countries, private consumption is the largest component of overall UK economic growth and continued weakness here is likely to keep a lid on any moves towards a sustainable from the current downturn. Indeed, the latest forecasts call for the economy to continue to shrink at least through the first quarter of next year.