Commenting on the latest international trade figures, which showed that after narrowing in the fourth quarter of 2016, the UK’s deficit widened by £5.7 billion to £10.5 billion in the first quarter of this year, Allie Renison, Head of EU and trade policy at the Institute of Directors, said:

“While there has been some pickup in exports since the referendum, the impact on the trade balance has been limited as imports have continued to outpace this increase. We should be cautious about overestimating the impact of sterling on exports in the short-term.

“The narrowing of the trade deficit in Q4 2016 was largely down to an exports increase in erratic commodities, which complicates our understanding of the underlying trend. It also reminds us that sterling’s devaluation is likely to take longer to feed through to export orders. Global growth is an equal, if not more important, factor in driving outbound trade. We shouldn’t be too pessimistic about today’s export figures, however, as the overall pattern since the referendum has been on the increase.

“We should not see an increase in imports as a bad thing, as trade is not a zero-sum game. The growth in imports highlights that domestic demand and consumption is still going strong. It’s also a reminder that many businesses cannot substitute foreign imports with domestic substitutes. 44% of IoD members import goods and services from abroad, and nearly half of those do so because of lack of availability in the UK, while a quarter use these inputs for use in their export activity.”

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