Sterling falls on trade deficit data

The value of the pound dropped this morning in response to new figures showing imports outstripped exports in March.

Data from the Office for National Statistics (ONS) showed that the UK's trade deficit was £3.7 billion in that month, a jump from £2.2 billion in February.

After excluding oil and other "erratic" items from its analysis, the statistics authority estimated that the volume of exports fell by 1.8 per cent in March compared with the previous month.

However, in this period the volume of imports increased by 3.5 per cent, the ONS found.

Sterling fell on the back of the publication of the data, with Ross Walker of UBS telling Reuters he is "sceptical we're going to see any significant contribution to growth this year from net trade".

"The much-needed rebalancing is not happening as quickly as we would have hoped, especially given the weakness in sterling," the analyst added.

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Posted by Sarah Pitton