The U.K.’s trade deficit with the rest of the world narrowed in July, official data showed Friday, a sign the weakened pound may be aiding exports following the country’s vote to leave the European Union.
The U.K.’s deficit in goods trade narrowed to GBP11.8 billion ($15.7 billion) in July from a revised GBP12.9 billion in June, the Office for National Statistics said, in line with forecasts from economists polled by The Wall Street Journal.
Sterling fell sharply in the immediate aftermath of the referendum, losing some 10% against the U.S. dollar. Manufacturer surveys have suggested that this gave a boost to exports, as British products became cheaper for overseas buyers, although ONS officials cautioned it is too early to be sure.
Speaking earlier this month at a summit of world leaders, British Prime Minister Theresa May said the U.K. is still open for business following the Brexit vote and is looking to establish new trade relations around the globe. “As we forge a new global role for the U.K., we can and will seize the opportunities that Brexit presents, and make a success of it,” she said.
As Britain prepares to extricate itself from the EU, its largest trading partner, the trade data will likely become a closely watched indicator of the government’s success in forging and strengthening the U.K.’s global economic relations.
But economists cautioned monthly trade data can be volatile and it may be months before any clear pattern emerges.
Including services, the nation’s overall deficit with the rest of the world narrowed to GBP4.5 billion in July from GBP5.6 billion in June, the ONS said. The shortfall narrowed both with other EU countries and those outside the bloc.