UK Trade Deficit Widens Sharply in September


UK’s trade gap increased to £2.84 billion in September of 2014 from a revised £1.77 billion shortfall in August. It is the second highest monthly trade deficit this year, due to a surge in oil imports.

Total exports of goods and services amounted to £40.89 billion in September while imports reached £43.73 billion. The trade in goods deficit amounted to £9.8 billion and was partly offset by an estimated surplus of £7.0 billion on services. 

In detail, exports increased by £1.0 billion to £24.0 billion. £0.6 billion of the increase was attributed to a rise in fuel exports; specifically oil exported to countries outside of the EU, which accounted for £0.4 billion of the increase. The second most significant increase was exports of miscellaneous manufactures which rose by £0.3 billion from August. Miscellaneous manufactures includes high value items such as works of art and jewellery, which both experienced notable increases in September.

Imports rose by £1.8 billion in September 2014; the largest monthly increase since March 2012. The increase mainly reflects a £1.1 billion rise in imports of fuels, in particular oil imports from countries outside the EU. Sizeable increases were also seen in imports of miscellaneous manufactures (up £0.4 billion) and machinery and transport equipment (up £0.4 billion). Imports of miscellaneous manufactures reached its highest level on record in September; the increase was, again, mainly due to trade in works of art and jewellery.

In September 2014, exports to countries within the EU increased by £0.1 billion. In the same period, imports from countries within the EU rose by £0.6 billion, reflecting a £0.2 billion increase in machinery and transport equipment. Outside the EU, exports rose by £0.9 billion and imports rose by £1.2 billion between August and September 2014. In terms of commodities, the increase in trade with non-EU countries was primarily due to exports and imports of fuels, specifically oil. Aside from fuels, the increase in trade outside of the EU also reflected increases in the export and import of miscellaneous manufactures. 

Between Q2 and Q3 2014, the trade in goods deficit widened by £0.9 billion to £29.0 billion. Exports fell by £0.3 billion whilst imports rose by £0.6 billion. In terms of commodities, the deficit in trade in fuels widened by £1.1 billion over the quarter, reflecting a £0.8 billion increase in imports. Germany remains the the UK's largest trading partner in terms of the value of goods exported and imported. However in Q3 2014 the UK recorded its largest ever deficit with Germany, reflecting a gradual decline in exports and rise in imports. In addition, the UK's surplus with the USA reached it's lowest level in almost eight years. Partially offsetting this were notable improvements to the UK's deficits with China and Hong Kong, reflecting a rise in exports and a fall in imports in Q3. 

ONS | Joana Taborda | joana.taborda@tradingeconomics.com
11/7/2014 11:28:39 AM