Britain’s trade deficit hit a near all-time high in the three months leading up to July, despite narrowing that month due to a strong rebound in exports.
Data from the Office for National Statistics (ONS), released yesterday (12 September), put the deficit for goods and services, excluding precious metals, at £27 billion in the quarter to July, up £1.2 billion on the previous quarter.
Total quarterly exports increased by £8.5 billion to £180.7 billion, but imports rose by £9.8 billion to £207.6 billion.
‘Enormous’ deficit
The Times reports that the UK’s total trade deficit fell in the month of July, declining from £11.4 billion in June to £7.8 billion.
However experts warned it will surge later this year, as fuel prices soar due to Russia’s war in Ukraine.
Gabriella Dickens, economist at Pantheon Macroeconomics, told the FT that the trade deficit will grow to a record 7.5% of GDP in the final quarter of the year, up from 4.7% in Q2.
Exports on the up
Exports of goods in July rose by 6.7% driven by rises in the exports of ships, mechanical machinery and vehicles to the US and China.
This drove a 5.4% rise in non-EU goods exports, while the volume of sales to the EU rose by 7.9%.
However, exports remain 8.4% below pre-pandemic levels, while imports were 3.9% higher than before the crisis.
Goods exports to the EU also rose between June and July, increasing by 7.9% to £17.4bn.
Badenoch’s new mission
New international trade secretary Kemi Badenoch is putting “economic growth, economic growth, economic growth” at the centre of her department’s mission, reports News Times.
“I’m looking forward to hearing lots of ideas from the officials about the things that we can do to help spread the mantra of free trade, free markets, freedom generally across the world,” she said in her first speech to DIT officials.