UK August Trade Deficit Largest in 11 Months


The UK’s deficit on trade in goods and services widened by GBP 1.39 billion to GBP 5.63 billion in August 2017 from an upwardly revised GBP 4.24 billion gap in July and way above market expectations of a GBP 2.80 billion gap. It was the largest trade deficit since September last year, as the goods trade gap hit a record high.

Imports of goods and services to the United Kingdom jumped by 3.2 percent to an all-time high of GBP 55.78 billion from GBP 54.08 billion in the previous month, boosted by higher purchases of basic materials (17.8 percent), semi-manufactures (10.3 percent), finished manufactures (2.5 percent) and food beverages and tobacco (1.3 percent). Among trading partners, imports of goods from the EU increased by 5.8 percent, mainly from the Netherlands (20 percent), Belgium & Luxembourg (9.7 percent), France (5 percent) and Germany (2.1 percent). Also, purchases from non-EU countries rose by 3 percent, as imports increased the most from Canada (32.9 percent), followed by the US (1 percent) and Norway (0.9 percent).

Exports increased by 0.6 percent to GBP 50.15 billion in August from GBP 49.84 billion in July, due to increases in sales of semi-manufactures (4.7 percent) and finished manufactures (2.7 percent). Among major trading partners, sales of goods to the EU grew by 2.3 percent, as sales increased mainly to Belgium & Luxembourg (6.1 percent) and Ireland (5.9 percent). Also, exports of goods to non-EU countries went up by 0.6 percent, namely to South Korea (32.5 percent) and the US (0.5 percent). By contrast, exports to China dropped 28.8 percent.

In the three months to August, the trade deficit widened by GBP 6.2 billion from the previous three-month period to GBP 13.2 billion, largely due to a switch from a surplus to a deficit on the balance of erratic commodities, such as non-monetary gold

ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
10/10/2017 9:28:03 AM