UK economy returns to growth in April while exports climb by £1bn

Wed 14 Jun 2023
Posted by: William Barns-Graham
Trade News

uk trade data

The UK economy returned to growth in April, with GDP rising by 0.2% following a 0.3% contraction in March, new figures from the Office for National Statistics (ONS) show.

The overall economy also grew by 0.1% in the three months leading to April 2023.

Trade figures

The value of UK exports rose in April by £1bn (3.4%) with imports decreasing by £0.7bn (1.4%).

The total trade deficit still stands at £12.3bn, but dropped by £12.6bn in the three months leading to April 2023, compared with the previous three months to January 2023.

Over this same period, the deficit for goods narrowed by £10.7bn to £52.5bn, while the surplus in services widened by £1.9bn to £40.3bn.

Post-Brexit lag

Despite these figures, a report from the UN this week showed that UK exports have been outpaced by all other G7 countries except Japan over the last decade.

Reported in the Guardian, the data from the UN Conference on Trade and Development (UNCTAD) shows that the UK’s goods and services exports grew by just 6% between 2012 and 2021, compared with a 29.1% increase for the EU.

Shadow trade minister Gareth Thomas told the Guardian that the sluggish growth was a result of additional burdens placed on British businesses following Brexit.

“In the last decade the Tories have failed to deliver on key trade targets, have cut support to businesses wanting to win new export contracts and have made trade with key allies more difficult,” he said.

Services bounce back

In the wider economy, the services sector’s growth of 0.3% in April is viewed by ONS as the main contributor to the rebound in GDP.

However, production output fell by 0.3% in the month following a growth of 0.7% in March. Construction also fell by 0.6% over the month.

As expected

The figure was in line with analysts’ expectations, according to the FT.

Ruth Gregory, an economist at consultancy Capital Economics, told the paper that the figures will “further raise hopes that the economy will escape a recession this year” but added that with the “full drag from high interest rates yet to be felt, it is too soon to sound the all-clear”.

The BBC's economics editor, Faisal Islam, has tweeted that chancellor Jeremy Hunt has responded to the ONS data by saying the figures confirm the “UK’s underlying resilience”, but added that “we still face a big issue with inflation”.

Chief economic advisor at EY ITEM Club, Marin Beck, has told the Guardian that April’s growth is likely to be followed by a weaker performance in May due to the extra bank holiday for the coronation and strikes in multiple sectors.