Reacting to the latest ONS figures on Trade for August 2022, William Bain, Head of Trade Policy at the British Chambers of Commerce (BCC), said: “The picture for trade in August was a mixed one but a loss of momentum in goods exports is detectable. On non-EU goods exports performance was relatively positive in August, but the drop in these exports to the EU is concerning. On the imports side, non-EU fuel imports continue to play a significant role.
“Added to recent World Trade Organisation forecasts on rising global trade headwinds in the coming year, this data indicates a slowing of momentum, particularly on EU goods exports.
“To counteract this, the UK Government needs to focus on really pushing awareness of free trade deals, especially among smaller businesses. It must also bring firms further into the fold on negotiations, so they have more involvement from the off, and take decisive action on reducing some of the removable EU red tape costs for traders.”
Trade data overview
UK goods export values in August 2022 failed to maintain their recent momentum as goods exports to the EU fell by 0.5% driven by a fall in chemicals and fuels exports. Non-EU exports rose by 4% in August, led by big rises in machinery and transport exports, fuels and miscellaneous goods. Overall, goods exports rose by only 1.2% compared with July.
Comparing the 3 months to August 2022 with the three months to May 2022, EU goods export values were 6.2% higher over that period compared with a 1.8% rise in non-EU goods export values.
Goods import values continued to rise in August again driven by elevated levels of fuel imports from non-EU states such as Norway and Qatar. Imports from the EU declined by 1.9% but non-EU goods imports values were at their highest levels since records began in 1997.
The effect of high gas prices in August 2022 played strongly into the rise in values of non-EU goods imports into the UK.
This leads to a widening of the UK’s deficit in trade in goods, rising to £61.9bn in the three months to August 2022. The trade in services deficit narrowed further in the three months to August 2022 to £36.3bn as exports continued to rise. Excluding inflation, the overall trade deficit was £6.5bn lower at £11.9bn in the three months to August 2022. Before removing the effects of inflation, the raw data indicated a slight widening of the trade deficit.