Corporate foreign exchange news
UK trade deficit up on oil imports
Wednesday, 12 August 2009 09:27:58 GMT

The UK's reliance on foreign oil caused the national trade deficit to widen in June, new data show.As the North Sea oil and gas industry languished under high exploration and production costs and more oil was imported to meet demand, the national trade deficit jumped a further £300 million in June, taking it to a total of £6.5 billion.However, the overall deficit for the month was still the second lowest figure seen this year, with the weakness in sterling helping to prop up exports in the early part of Q2."Todays figures are consistent with a small positive contribution from net trade to GDP growth in Q2," said Colin Ellis, economist at Daiwa Securities SMBC, speaking to the Financial Times.The improved performance of the sterling in the latter half of the quarter also helped to reduce the cost of imports and other erratics by 1.9 per cent, the Office for National Statistics data also showed.Since the onset of the economic crisis, the UK oil and gas industry has been lobbying government for a reduction in tax payable licences in the North Sea in order to maintain the viability of offshore exploration and production projects.

