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Pan Sen Macro: The escalation of the situation in the Middle East may exacerbate the trade imbalance in the UK
Rob Wood, chief UK economist at Pan Sen Macro, said in a report that any escalation of the Middle East conflict could exacerbate the UK's trade imbalance. Wood noted that the UK's trade deficit widened in January, with strong imports putting pressure on the trade balance. However, since prices in the services sector are rising faster than commodity prices, the trade balance should improve, and the decline in the cost of energy imports will also help. However, Wood said any spike in energy prices due to worsening tensions in the Middle East would threaten the trend.