The UK’s goods and services trade deficit narrowed by £1.1 billion to £9.0 billion in the three months to July, with a larger services surplus offsetting most of the country’s deficit in goods.
The Office for National Statistics release on 11 September compares May to July with February to April. The figures exclude precious metals and measure trade in current prices, without removing inflation.
The services surplus rose by an estimated £0.7 billion to £52.6 billion. The goods deficit narrowed by £0.4 billion to £61.6 billion.
A trade deficit means imports exceed exports; a surplus means the reverse. The UK’s large surplus in services, including financial, computer and other business services, substantially reduces its total trade shortfall.
July goods imports rose faster in cash terms
July alone showed a different direction for goods. Exports rose by £0.9 billion to £33.9 billion, while imports increased by £1.3 billion to £55.3 billion. That widened the monthly goods deficit by £0.4 billion to £21.4 billion.
Higher imports of aircraft from the US and cars from China helped lift purchases from outside the EU. Goods exports to the EU rose by 5.2%, with aircraft, metals and pharmaceuticals contributing.
Monthly movements can be influenced by expensive individual shipments. The three-month figures provide a broader comparison, but neither measure describes the experience of every exporter.
Services estimates remain provisional
The ONS’s quality and methods guide explains that goods and services are measured from different sources. Customs information supplies most goods data, while services rely more heavily on surveys and other records.
Monthly services figures are estimated from quarterly information and can be revised as fuller data arrive. The latest bulletin says early services estimates currently include forecasts, so the reported surplus remains provisional.
Precious metals are another source of variation. Large transactions through the London market can move the trade balance without reflecting a comparable shift in the flow of ordinary goods. Keeping the precious-metals treatment consistent is necessary when comparing releases.
The trade report follows the same day’s GDP figures, covered in our report on July’s 0.4% increase in UK output. GDP measures production within the economy; the trade balance measures the difference between exports and imports. A stronger output month does not require every trade measure to improve.
The ONS is due to publish August’s trade figures on 15 October.
