Reacting to the latest Office for National Statistics data on Trade, William Bain, Head of Trade Policy at the BCC, said: “August was not a good month for UK goods exports. There were falls in both EU and rest of the world trade – where after removing the effects of inflation, volumes fell by 7.2% month on month. The export gains of July went into reverse during August, which brings the UK more into line with the global trade picture for June-July this year. On the services front, it was another broadly flat month for UK exports – suggesting that the growth in overseas demand for services from last year is not being sustained. This may be a function of weaker than expected global economic conditions, especially in consumer spending. The overall picture on UK goods exports volumes to the EU has been flat over the last 18 months, when you remove the effects of inflation. The BCC has recommended several areas where this could be addressed, including a veterinary deal, youth mobility schemes, and improved conditions for firms on VAT compliance and fiscal representatives.”
In Depth Analysis
There was a 4.6% fall in UK goods export chained volumes (the measure which removes the effects of inflation) on the previous month, and a 1.1% decline in goods imported. The trade deficit increased slightly by £0.3bn to £12.7bn in the three months to the end of August. Goods export volumes to the EU declined by 1.8% month on month, and to the rest of the world by 7.2% month on month. Goods imports volumes from the EU fell by 3.2% from July but import volumes from the rest of the world rose by 1.7%. Estimated UK services export performance remained flat for a further month – on both the chained volumes and current value measures.
The fall in goods imports from the EU was driven by reduced chemical, machinery, transport equipment and manufactured goods imports. Fuel imports rose slightly compared with July 2023. A rise in non-EU goods imports was down to increased gas imports from Norway, and higher levels of manufactured goods from China.
Exports of drink, tobacco and other manufactured goods fell slightly to the EU during August 2023. Exports to the rest of the world experienced downward pressures in August in the chemicals, machinery, cars (to US and China) and fuels sectors.