UK trade deficit in goods and services narrowed to £2.0 billion in October

The UK deficit on trade in goods and services was £2.0 billion in October, a narrowing of £3.8bn from September, while the deficit on trade in goods (excluding services) was £9.7bn, a narrowing of £4.1bn from the previous month.

Exports rose by £2.1 billion in October to £26.8 billion, while imports decreased by £1.8 billion to £36.5 billion.

Between the 3 months to July 2016 and the 3 months to October 2016, the total trade deficit for goods and services widened by £4.7 billion to £13.2 billion.

Balance of UK trade in goods and services, October 2015 and August 2016 to October 2016:

£ billion

Balance of trade in goods Balance of trade in services Total trade balance
EU Non-EU Total
2015 Oct -7.6 -4.0 -11.6 7.5 -4.1
2016 Aug -7.8 -5.7 -13.5 8.0 -5.4
Sep -8.6 -5.3 -13.8 8.0 -5.8
Oct -8.1 -1.6 -9.7 7.7 -2.0
Source: Office for National Statistics

The total trade deficit for goods and services for the third quarter (July to Sept) of 2016 is estimated at £14.9 billion (up from the previous estimate of £11 billion), a widening of £6.7 billion from the second quarter (Apr to June).

ONS statistician Hannah Finselbach said: “Following the EU referendum the UK trade deficit widened in the third quarter of 2016 and then in October it narrowed again,” she said.

“There remains only limited evidence so far that the depreciation of sterling has led to a marked increase in UK exports.”

Commenting on the UK trade statistics Suren Thiru, Head of Economics at the British Chambers of Commerce, said, “The marked narrowing in the UK’s trade deficit in October was better than expected and reflects both strong export growth during the month, particularly outside the EU, as well as falling imports.

“However, the monthly trade data can be volatile and the UK’s attempts to make sustained progress in turning its export performance around continues to be hampered by sluggish world trade growth in recent years.

“Furthermore, while some firms are benefiting from the declining value of sterling, many are also facing the rising costs of imported goods and materials.

“While the additional finance and insurance support for UK exporters announced in the Autumn Statement is a welcome step, more must be done to increase direct support for those firms looking to access new markets.”