Record Car Exports Boost UK Trade Figures

A record export of cars worth £2.4bn in August has helped boost UK trade figures, according to official statistics.

The Office for National Statistics (ONS) said total export of goods increased by £800m in the month to £23.6bn, helping to narrow the country's trade deficit - the difference between the goods and services imported versus those exported - to £3.3bn.

It represented a narrowing of 1.2bn on the previous month.

Car exports contributed £600m more to the export performance while sales of chemicals overseas added £500m.

The ONS said imports of goods decreased by £300m to £34.7bn over the month.

Boosting overseas trade is a crucial plank of the Government's plans to rebalance the UK economy away from being so reliant on consumer spending.

However, the slowdown in developing economies and continuing weakness in the euro area - the country's largest trading partner - are hampering demand while the strong pound has made UK goods less attractive.

UK car production has enjoyed a recovery - currently back at pre-recession levels in terms of annual performance - but it remains to be seen whether worries about the global recovery will hamper demand.

The emissions scandal currently engulfing VW could provide a short term demand boost for UK manufacturers despite the fallout from VW's 'defeat device' raising questions about exhaust emissions across the industry as a whole.