The EU was the fastest growing partner for trade in British services during 2016, with companies’ increased use of financial services at the vanguard of record growth, according to government data published today.
UK imports of services rose by £5bn in 2016, according to the most up-to-date data from the Office for National Statistics (ONS), although that was less than the £9.2bn increase in exports.
Financial services products used by foreign firms made the largest contribution to the rise in exports in 2016, increasing from £14.9bn in 2015 to £18.4bn, the ONS said.
The figures illustrate the depth of the trading relationship between the UK and the EU in the services sector ahead of Brexit in March 2019, and particularly the increasing reliance of British and European firms on cross-border trade in financial services regardless of their location.
The City has been particularly strident in its calls for a transitional deal temporarily securing services trade after Brexit to be agreed, with lobby groups arguing any restriction in financial services trade access will harm companies in the UK and the EU.
Stephen Jones, chief executive of lobby group UK Finance, said: “The considerable growth in trade in services between the UK and Europe highlights the importance of services for our economy.
"It is an important reminder that any future EU-UK agreement on trade needs to provide for cross-border market access in services for the benefit of consumers and businesses on both sides of the Channel."
Regulators including the Bank of England have also repeatedly called for a transition to be agreed as soon as possible.
Overall services imports and exports to all countries surged to record growth during the year, the ONS said. Exports excluding transport, travel, and banking rose from £123.2bn in 2015 to £142.7bn in 2016, an increase of 15.8 per cent. Services account for the vast majority, almost four-fifths, of British output.
The figures add more detail to trade figures published in the Pink Book in October, which showed the financial services trade balance increased by £8.4bn to hit a record high of £50.8bn in 2016, an increase of 19.9 per cent from 2015.
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