The war also saw exports to the EU rise to the highest level on record as the UK increased gas flows from other countries to the bloc after Russia cut off energy supplies to Europe. Figures from the Office for National Statistics showed that the trade deficit in goods and services, excluding precious metals, widened by £1.2bn to £27bn in the quarter to July compared with the previous quarter, a near record since at the time they were first comparables. collected in 1997. William Bain, head of trade policy at the British Chambers of Commerce, a business association, said the overall picture for trade was “worrying”. He added that the data “proves the case for the UK government to revamp its export strategy to prioritize export-led growth as a greater proportion of UK economic growth”. The widening was driven by the rising value of imports, reflecting rising energy prices due to Russia’s invasion of Ukraine and a weak export market.
You are viewing a snapshot of an interactive graphic. This is probably because you are offline or JavaScript is disabled in your browser.
The UK is a net energy importer and natural gas prices hit a new high in August, which is likely to further boost the value of imports. Exports are also likely to continue to struggle as external demand from key trading partners softens and trade frictions over Brexit remain. “The trade deficit is going to get massive in the coming months,” said Gabriella Dickens, an economist at Pantheon Macroeconomics, a consultancy. Dickens added that it expected the trade deficit to widen to a record 7.5% of GDP in the final quarter, from 4.7% in the second quarter, “making sterling even more sensitive than usual to changes in foreign investor sentiment.” ». The figures come after Prime Minister Liz Truss last week announced policy measures aimed at making the UK a net energy exporter by 2040, including lifting a three-year ban on fracking in England. Following the reduction in energy flows from Russia to Europe, the UK is processing large volumes of liquefied natural gas arriving at its ports from countries such as the US and Qatar. It then regasifies it for export to the EU via subsea pipelines from Bacton in Norfolk to Belgium and the Netherlands. That trend was captured in trade figures by a 7.9 per cent rise between June and July in UK goods exports to the EU to £17.4 billion, the highest since records began in January 1997. UK fuel exports accounted for £800m of July’s £1.3bn increase in goods exports to the EU. UK fuel exports to the bloc more than doubled compared to last July, while exports to non-EU countries remained unchanged. In July, the UK exported around £900 million worth of natural gas to the EU, around three times higher than the same month last year, despite a decline in UK gas trade due to pipelines operating at excess capacity. As a result, the UK exported £50.3bn worth of goods to the EU in the three months to July, more than £2bn more than exports to countries outside the EU. This contrasts with 2019, when exports of goods to non-EU countries were larger than in the bloc “The fuel trade has played an important role in the rise in UK exports to the EU,” said BCC’s Bain.
