The U.K. global goods deficit steady

The U.K. global goods deficit was steady in May, although exports rose 1.5% on the month, the Office for National Statistics said Wednesday.

The ONS said the global goods deficit was GBP7.5 billion, slightly wider than the GBP7.4 billion forecast by economists.

The April deficit was revised down to GBP7.5 billion from the GBP7.6 billion originally estimated last month.

Exports of goods grew by 1.5% to GBP21.06 billion in May from GBP20.76 billion in April. In a sign that the weaker pound was helping shore up the economy, exports grew 6.0% in March to Maycompared with the previous three month period and were up 14.2% from a year earlier.

While the U.K. pound has declined, export prices have climbed significantly over the last year, up 11.3% in the latest three months from a year earlier.

The stronger export sector has helped offset some of the impact of a broadly slowing economy, as the U.K. faces pressures from rising prices, the credit crunch and a severe housing market correction.

Imports of goods rose 0.9% in May and were up 2.5% in March to May from the previous three-month period.

The data are unlikely to sway the Bank of England ahead of its Monetary Policy Committee meeting this week. With the economy slowing but price pressures rising, the MPC is strongly expected to keep interest rates on hold at 5.00%.

ONS said goods trade with non-European Union countries showed a deficit of GBP4.0 billion in May, in line with economists' forecasts and compared with a downwardly revised figure of GBP4.1 billion in April.

The U.K.'s trade surplus with the U.S. increased in May despite the economic troubles there. Exports to the U.S. rose to GBP2.97 billion and the surplus swelled to GBP1.1 billion in May from GBP871 million. That's the largest surplus in at least the last three years.

The deficit with European Union countries was GBP3.5 billion in May, compared with GBP3.4 billion in April.

According to the ONS, the total trade deficit, including services, was GBP4.2 billion in May, wider than the GBP4.1 billion deficit in April.

That compares with economists' forecast of GBP4.0 billion.

The U.K. posted a surplus of GBP3.2 billion in services in May, compared with GBP3.5 billion the previous month.

All figures seasonally adjusted on a balance of payments basis.

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