Latest HMRC figures show the UK trade gap is widening

 
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The First Freight Train From China Arrives In The UK
Trade with China has however increased (Source: Getty)

The UK’s trade deficit has widened to £11.1bn according to the latest monthly figures published by HM Revenue & Custom (HMRC).

Exports fell by 4.4 per cent in February compared to the previous month, while imports fell more slowly by 0.4 per cent over the same time-period, despite a weak pound.

Figures released by the Office for National Statistics (ONS) today were also disappointing, showing a 0.7 per cent drop in total production, with factory output falling 0.1 per cent from January.

The pound fell 0.4 per cent against the dollar today after the release of these two datasets.

The UK’s trade gap increased by 25 per cent in the last quarter of 2016 compared to the previous year, which HMRC put down to the impact of trade in non-monetary gold.

In February, the deficit in trade of goods reached a five month high, and the overall trade deficit rose to £3.7bn.

Exports of metals, mineral fuels and organic chemicals all fell in February compared to the previous month. Motor vehicles were the commodity which increased most in export value, up £153m or 7.6 per cent.

The UK ran a £6bn surplus in services in the last quarter but this is the sector most at risk from Brexit negotiations.

This morning, director of the Bank of England Mark Carney warned of the risks of Brexit and asked firms to put their contingency plans in writing.

The proportion of total exports from the UK to the EU reached 47 per cent in February, after ranging from 38 per cent to 51 per cent over the past eighteen months.

UK exports to top five countries, February 2017


In February, UK exports to Germany, France, Ireland and Switzerland all fell compared to January, while exports to non-EU countries such as China and the USA increased. Exports to China showed the largest increase year-on-year increase, up by £410m to 44.1 per cent.

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