Swelling non-EU imports widens UK trade deficit

Just one in 10 British businesses are involved in overseas trade, reveals a fresh study published by the British Chambers of Commerce (BCC) yesterday

Swelling imports from non-EU countries driven by the UK bolstering trading relationships outside the European bloc is widening Britain’s trade deficit.

An 11.2 per cent jump in imports from non-EU countries in September drove the trade deficit up £3.1bn to nearly £7bn in the third quarter.

Imports from countries outside the EU have been higher than those from nations inside the EU for the ninth consecutive month since January this year, according to the Office for National Statistics (ONS).

Despite the trade balance being in overall deficit, the UK services trade balance is in surplus, reflecting the economy’s heavy reliance on services firms to generate output.

The trade in services surplus jumped £2.2bn billion to £35.6bn, driven by financial services exports, the ONS said.

Exports from the UK to the EU jumped 5.7 per cent over the last month to £13.6bn, while imports climbed by a smaller amount.

“Exports to EU countries were £0.8bn higher than exports from non-EU countries in September 2021. Imports from non-EU countries continue to be higher than from EU countries for the ninth consecutive month,” the ONS said.

“After the gap between the two closed across the summer months, it has now increased to its widest point of the year.”