UK trade deficit widens to highest level since 2008, ONS figures reveal
The gap between imports and exports for the first three months of 2016 was £13.3 billion, up from £12.2 billion in the fourth quarter of 2015, according to figures from the Office for National Statistics (ONS). This means that the UK’s trade deficit for the first quarter is the biggest it has been since 2008.
The ONS said that the widening trade gap was partly attributable to a £1.9 billion rise in imports, such as machinery, cars, clothing, jewellery and footwear. Meanwhile, exports increased by only £500 million, driven by chemical products.
There was, however, a slight improvement in March, with the trade in goods deficit narrowing to £11.2 billion from £11.4 billion in February.
David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: ‘In spite of the small improvement seen in March, the UK’s trade deficit worsened over the quarter and remains unacceptably large.
‘The trade figures are a further reminder that our external position remains vulnerable. It needs to be a national priority to support businesses in exporting goods and services, and additional efforts are needed to help firms to break into new and faster-growing markets.’
Meanwhile, economist Howard Archer from IHS Global Insight called it ‘a truly horrible first-quarter trade performance that clearly weighed down on GDP growth’.
He added: ‘The hope has to be that UK exporters will increasingly be helped by the overall marked weakening of the pound in 2016, although the pound has climbed off its April lows’.
UK economic growth has already slowed to 0.4% in the first quarter of 2016.