UK trade balance widens in August - ONS

11th Oct 2024 07:26

(Sharecast News) - The UK's trade deficit widened in August, official data showed on Friday, after a jump in imports outstripped the rise in exports.

According to the Office for National Statistics, the UK's total goods and services trade balance excluding precious metals increased by £3bn to £10bn in the three months to August.

Within that, the trade in goods deficit widened by £2.6bn to £52.4bn, while the trade in services surplus was estimated to have narrowed by £0.4bn to £42.4bn.

The ONS said the overall deficit had widened because of the increase in the imports of goods. Total imports rose by £6.7bn over the three-month period, while exports increased by just £3.7bn

Goods imports from non-European Union countries rose £3.5bn, or 5.6%, while goods imports from the continent grew by £1.6bn, a 2.1% uptick.

In contrast, exports of goods to countries outside of the EU improved by £1.3bn, or 2.9%, while goods exports to the EU increased by £1.2bn, or 2.6%.

Kathleen Brooks, research director at XTB, said: "The UK continues to import more goods than it exports. However, within the trade balance data there was reason to be hopeful. Our service exports remain strong.

"The trade in goods deficit between the UK and the EU, and the UK and the rest of the world, narrowed slightly, and exports of UK services rose at their fastest pace in more than six months in August."

The update was released alongside GDP data, which showed the UK economy returned to growth in August. GDP ticked up 0.2% following no growth in June and July, in line with expectations.

However, while the main sectors of the economy all grew in August, the ONS acknowledged that the broader picture was one of "slowing growth" when compared to the first half.

Rachel Reeves, who is due to deliver her first budget as chancellor next week, said growing the economy was the "number one priority" for the new government.