New data from the Office of National Statistics has found that the UK’s trade deficit has increased at a record rate.
The latest figures from the ONS show a fall in the value of imported and exported goods, creating a quarterly trade deficit of £27.9bn – up £2bn on the previous period.
This marks the biggest jump in the gap between the value of exports and imports since 1997, with soaring energy costs, inflation and Russia’s invasion of Ukraine all contributing to an increasingly difficult trading environment.
In detail, imports increased by £14.3bn, with exports also rising but more slowly to £12.3bn, leaving a total trade deficit against the UK’s GDPR of 4.5%.
More positive however was the UK’s trading relationship with the EU, with the value of goods moving back into the European Union rising 16.3% thanks in part to the re-exportation of fuel, ships, aircraft and mechanical machinery.
Exports to the rest of the world also rose by just under 9%.
This leaves a confusing picture as to how the UK economy is performing on the international stage, and just how able businesses have been to mitigate not only Brexit, but also recover from the pandemic and now mitigate inflation, war-related supply disruptions and surging fuel costs.
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Director general of the IOE&IT, Marco Forgione cautioned that: “Although superficially the ONS figures look positive, the IOE&IT Monthly Exporter Monitor shows that fewer companies are exporting and fewer goods are being exported.
“This indicates there is significant inflationary pressure building in the economy.”