The UK’s trade deficit widened to £6.6bn ($8.98bn) in the three months to August, according to data published on Wednesday by the Office for National Statistics (ONS). Imports and exports both fell in the four weeks of August.
Fall in exports and imports
Total imports of goods, excluding precious metals fell by £1.3bn (3.1%) in August 2021. This was mainly driven by a £1.2bn fall in imports from non-EU countries. There was also a £0.1bn decline in imports from the EU.
Imports from non-EU countries remain slightly higher than those from EU countries, but the gap is now at its “narrowest since the end of the Brexit transition period,” the ONS report said.
Exports saw a decline in August of £0.6bn to the EU and £0.7bn to non-EU countries.
Loss of momentum
Total imports of goods, excluding precious metals, increased by £4.1bn in the three months to August 2021. Exports decreased by £1.2 billion over the same period.
Atul Bhakta, CEO of One World Express total Capital.com: “After a strong start in securing a trade deal with Australia earlier this year, the UK government appears to have lost some momentum – the trade deal with New Zealand, for example, is yet to be pushed over the line. This, combined with additional factors, such as the pandemic and post-Brexit complexities have all contributed to a decline in UK exports. As such, the widening of the UK’s trade deficit will come as little surprise to many businesses.”
“It is important that the government restore businesses’ confidence and nurture their international ambitions. Ensuring that businesses are aware of the status of each trade deal would be beneficial. So too would providing businesses with the right support – financial, resource, or otherwise – to help them to develop robust international trade strategies.”
“Given that we are less than a year on from Brexit, it is understandable that the UK is still finding its footing on the international stage. However, as more trade deals are agreed and borders continue to re-open post-Covid, business confidence will begin to grow. Provided they receive the right government support, I see no reason why the UK shouldn’t see a gradual closing of the trade deficit over the coming years.”