A rise in EU exports couldn't prevent the UK's trade gap from widening by £3bn in August

 
Emma Haslett
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Higher EU exports weren't enough to stave off a widening trade gap (Source: Getty)

The UK's trade deficit widened by almost £3bn to £10bn in the three months to August, despite a rise in exports to the European Union.

In fact, although exports to EU countries climbed by £1.7bn, or 4.1 per cent, between the three months to August and the quarter before, exports to non-EU countries more than offset that, declining by £4bn, or 8.8 per cent.

The rise in EU exports was driven by machinery and manufacturing equipment, which rose by £752m during the period. However, sales of fuels to non-EU countries fell by £1.9bn.

UK businesses voiced their concerns at the figure, saying it signified the UK's weak trading position.

"Taken together with the recent widening of the current account deficit, the figures paint a rather gloomy picture of the UK’s external position," said Suren Thiru, head of economics at the British Chambers of Commerce.

"The latest trade data is further evidence that the decline in sterling’s value over the past year is doing little to boost the UK’s overall trade position.

"Businesses continue to report that the post-EU referendum weakness in sterling is hurting as much as its helping, with firms continuing to face higher input costs due to the weakening currency, particularly those locked into global supply chains. For those companies that rely on overseas suppliers for their production equipment, a weak pound also makes investment in growth less viable."

He called on the government to push for further progress on trade talks during Brexit negotiations.

"Businesses want to see comprehensive trade talks begin in the EU negotiations before the end of the year, and need answers to the practical questions about our trading relationship with Europe beyond March 2019."

Read more: Don’t fall for the myths – free trade enriches the world

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