- IHS Global Insight
The UK's trade deficit widened in the first quarter to its biggest value since the onset of the financial crisis, reinforcing the view that global weakness is weighing on the economy. Britain's economic growth has already slowed to 0.4% in the first quarter. The deficit widened to 13.3 billion pounds, the most since the start of 2008, from 12.2 billion pounds in the fourth quarter of 2015, according to the Office for National Statistics. The UK trade shortfall widened over the quarter due to a 1.9 billion pounds increase in imports such as mechanical machinery, cars, clothing, jewellery and footwear. Meanwhile, exports rise by just 500 million pounds, driven by chemical products.
Data from the ONS showed that Europe is gradually becoming a less important destination for British companies. In 2000, 60% of exports were destined for other EU countries, but the percentage dropped to 58% in 2005, 54% in 2010 and 47% in 2015. Over the same period, imports from the EU remained constant, making up for 54% in both 2000 and 2015. Still, the EU remains the biggest market for British exporters, which sell three times more to its member states than they do to the US. A British Chambers of Commerce survey found that six in 10 exporters favour staying in the EU.
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