UK July Trade Deficit Smallest in 5 Months



The UK trade deficit narrowed by GBP 0.83 billion to GBP 0.11 billion in July 2018 from a downwardly revised GBP 0.94 billion in the previous month, and below market expectations of a GBP 2.1 billion gap. It was the smallest trade deficit since a surplus was recorded in February, as both exports and imports hit all-time highs.

Exports of goods and services from the UK increased 2 percent to an all-time high of GBP 54.38 billion in July from GBP 53.33 billion in the previous month, due to higher sales of goods (2.8 percent), in particular fuels (20.5 percent), material manufactures (2.6 percent), and food & live animals (1.4 percent). Meanwhile, there was a decline in exports of machinery & transport equipment (-1.5 percent), miscellaneous manufactures (-3.5 percent) and chemicals (-3.2 percent). Exports of services advanced 0.9 percent.

Among major trading partners, exports of goods to the EU went up 2.1 percent, as sales increased mainly to Germany (2.9 percent), the Netherlands (9.9 percent), Ireland (8 percent), Belgium (6 percent), Spain (4.1 percent) and Italy (4.5 percent); while there was a decline in exports to France (-3.4 percent). Also, sales to non-EU countries jumped 3.5 percent, namely to the US (4.8 percent), China (1.7 percent), Switzerland (22.2 percent), South Korea (85.5 percent), Hong Kong (34.2 percent), Turkey (5 percent) and India (17.3 percent). Exports were lower for the UAE (-11.5 percent) and Canada (-25.5 percent).

Imports rose at a softer 0.4 percent to a record GBP 54.49 billion in July from GBP 54.28 billion in the previous month. The increase was driven by a 0.6 percent rise in imports of services and a 0.3 percent gain in purchases of goods, mainly fuels (8 percent), miscellaneous manufactures (2.7 percent), and food & live animals (2.3 percent). On the other hand, imports fell for machinery & transport equipment (-2.6 percent), chemicals (-2.2 percent), and material manufactures (-1.8 percent).

Among trading partners, imports of goods from non-EU countries went up 2.6 percent, as purchases increased the most from China (10.8 percent), Norway (14.9 percent), Russia (20.3 percent), Japan (4.9 percent), Turkey (3.3 percent) and India (19.5 percent); while those from the US dropped 5 percent. By contrast, imports from the EU decreased 1.5 percent, mainly from Germany (-4.2 percent), the Netherlands (-2.8 percent), Italy (-0.1 percent) and Spain (-4.5 percent). There was an increase in imports from France (9.7 percent), Belgium (0.7 percent) and Ireland (6.7 percent).

In the three months to July, the trade deficit narrowed GBP 1.4 billion to GBP 3.4 billion, as exports of goods and services both increased more than imports.

UK July Trade Deficit Smallest in 5 Months


ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
9/10/2018 9:26:34 AM