The UK’s trade deficit in goods and services widened by £1.3bn to reach £10.4bn in the three months to January as exports of cars and fuels fell, the Office for National Statistics (ONS) has said.
Britain’s trade in goods deficit widened by £1.6bn with EU countries and £0.8bn with non-EU countries to reach a total of £38bn, the ONS’s newly released figures have shown.
The widening goods deficit was offset by an increased surplus in services, which grew by £1.1bn to a total of £27.7bn in the three months to January 2019, as exports of services grew by £2.8bn.
Cars made up the bulk of the widening trade deficit, as exports fell by £1.2bn and imports increased by £1bn, 90 per cent of which was due to increased imports from the EU.
The total trade deficit widened by £8.2bn in the 12 months to January 2019 to reach £32bn, the ONS said. The trade in services surplus narrowed by £4.8bn, mainly due to Britain importing more financial, insurance, pension, and other business services.
Professor L Alan Winters of the University of Sussex's trade policy observatory said: "It's not terribly surprising that the trade gap is widening. Investment has been falling and companies are moderately depressed."
"On the services story my view is very strongly that the sort of deals that we've been discussing with Europe are very unsatisfactory because they exclude us from the single market from services with really no compensation elsewhere", he said. "Financial services is on the move", he added.
Despite the goods deficit with the EU growing in the three months to January, in the 12 months to January the trade in goods deficit with the bloc narrowed by £110m. This was offset, however, by an increase of £3.6bn in the goods deficit with non-EU countries.
Breaking down the figures, the ONS said: “The trade in goods deficit widened £3.4bn in the 12 months to January 2019 as imports of goods increased £14bn compared with exports, which rose by £10.6bn.”
“The largest contributors to the increase in both exports and imports were fuels, mainly oil, which increased £10.5bn for imports and £7.1bn for exports.”