UK Trade Deficit Widens As Imports Hit New Record

The UK’s deficit on trade in goods and services widened by £2.3 billion to £4.9 billion in March 2017 from a downwardly revised £2.7 billion in February. Imports increased in the month by £2.9 billion to a new record high of £53.9 billion, due to an increase in purchases of goods from both EU and non-EU countries. Exports increased by £0.6 billion to £49.0 billion.

Imports of goods and services rose by £2.9 billion to a new record high of £53.9 billion from £51.0 billion in the previous month, mainly due to an increase in purchases of goods. At the commodity level, the main contributors to this increase were chemicals, oil, cars and mechanical machinery. Among trading partners, imports of goods from the EU increased by 5.7 percent, mainly from the Netherlands (14.5 percent), Spain (11.7 percent), Sweden (5.2 percent) and Germany (4.4 percent). Imports from non-EU countries also rose by 10.6 percent, boosted by higher purchases from the US (13.4 percent), China (7.1 percent) and Norway (6 percent).

Exports of goods and services increased by £0.6 billion to £49.0 billion in March from £48.4 billion in February, due to an increase of £1.1 billion in exports of trade in goods while exports of services fell £0.4 billion. Sales of goods to the EU rose by 6.1 percent, mainly to France (12 percent), Germany (7.2 percent) and Ireland (6.8 percent). Also, exports to non-EU countries grew by 1.8 percent, boosted by higher sales to China (9.2 percent) and the US (2.3 percent).

On the price front, export and import prices increased by 1.5 percent and 1.4 percent respectively, with the value of sterling decreasing by 1.3 percent in March 2017 compared with the February 2017 average. However, it remains 10.7 percent lower when compared with March 2016.

Between the fourth quarter of 2016 and the first three months of 2017, the total trade deficit (goods and services) widened by £5.7 billion to £10.5 billion; this followed a sharp narrowing in the previous period. The widening of the deficit reflected a rise in imports (3.3 percent) and a fall in exports (-0.5 percent) over the period. This was mainly due to increases in purchases of machinery and transport equipment (mainly mechanical machinery and cars), oil and chemicals.

UK Trade Deficit Widens As Imports Hit New Record

ONS | Joana Ferreira |
5/11/2017 9:19:41 AM