FTSE Drop After Trade Deficit

FTSE Drop after Trade Deficit.

The Office for National Statistics (ONS) released its publication today which showed that the UK trade deficit widened in May. As a result the FTSE 100 dropped 0.7% adding to an already poor week.

Being blamed for the widening was a rise in airplane imports. The deficit was offset by a UK services sector which held a £6.8bn trade surplus, this meant that the overall deficit for May hit £2.4bn up from the £2.1bn in April.

FTSE was already hit with bad news this week as a shock drop in manufacturing output was reported by the ONS. The pound also dropped 0.2% following the news.

UK exports of goods did increase by £0.1bn to £24.1bn, however imports of goods increased by £0.5bn to 33.2bn. In an attempt help economic recovery in the UK, the government has introduced a number of new measures to try and help exports such as increasing the available export finance.