UK Trade Deficit Narrows as Exports Hit Record High

The UK’s deficit on trade in goods and services narrowed by GBP 0.70 billion to GBP 2.75 billion in September 2017 from a downwardly revised GBP 3.46 billion gap in August and way below market expectations of a GBP 4.60 billion gap. It was the smallest trade deficit since May.

Exports of goods and services from the UK increased 2.2 percent to an all-time high of GBP 51.58 billion in September from GBP 50.49 billion in August. Exports of goods jumped 4.5 percent mainly due to higher sales of unspecified goods (including non-monetary gold) while exports of services fell 0.8 percent. Among major trading partners, exports of goods to the EU grew 1.2 percent, as sales increased mainly to France (7.3 percent), the Netherlands (5.0 percent), Spain (4.4 percent), Italy (1.3 percent) and Germany (1.0 percent) while exports fell to Belgium & Luxembourg (-3.2 percent) and Ireland (-3.1 percent). Also, exports of goods to non-EU countries climbed 7.9 percent, namely to Hong Kong (57.4 percent), Switzerland (50.6 percent), China (32.4 percent) and Japan (7.6 percent), while exports to the US dropped 1.7 percent.

Imports rose at a slower 0.7 percent to GBP 54.34 billion from GBP 53.94 billion in the previous month, boosted by a 0.4 percent increase in purchases of goods and a 1.6 percent rise in imports of services. Among trading partners, imports of goods from the EU increased 1.2 percent, mainly from Spain (8.1 percent), Italy (4.2 percent), Germany (3.9 percent), and Belgium & Luxembourg (2.7 percent), while purchases fell from the Netherlands (-5.6 percent) and France (-1.5 percent). On the other hand, purchases from non-EU countries fell 0.5 percent, as imports decreased the most from China (-1.4 percent) and the US (-0.8 percent), while purchases from Norway rose 6.8 percent.

In the three months to September 2017, the trade deficit widened by GBP 3.0 billion to GBP 9.5 billion, largely due to an increase in imports of goods, particularly of machinery, unspecified goods (including non-monetary gold) and fuels. This was partially offset by a decrease in imports of aircraft. Imports of goods from both EU and non-EU countries increased between the three months to June 2017 and the three months to September 2017; exports to EU countries increased by GBP 0.9 billion, while exports to non-EU countries fell by GBP 1.7 billion in the same period.

UK Trade Deficit Narrows as Exports Hit Record High

ONS | Joana Ferreira |
11/10/2017 10:20:01 AM