UK Trade Deficit narrows to £3.5bn in October

The UK’s deficit on trade in goods and services narrowed in October to £3.5 billion from the revised £3.6 billion in September.

The deficit on trade in goods in October narrowed to £4.4 billion. This reflects a turnaround in the balance on erratic items. There were falls in imports of aircraft and precious stones and rises in exports of aircraft and silver. Higher exports of a range of manufactured goods only partly offset by lower exports of oil resulted in a narrowing of the deficit with non-EU countries to £2.3 billion. The deficit with the EU widened slightly to a record £2.1 billion. The surplus on trade in services was little changed at £1.0 billion.

For the second successive month, trade in oil recorded a much reduced surplus compared with previous months. This is primarily due to higher imports of petroleum products in both September and October as a result of production problems in one refinery.

In volume terms (excluding oil and erratic items), exports of goods rose by two per cent between September and October. This increase reflected a six and a half per cent rise in exports to non-EU countries. Within exports of manufactured goods there was a rise of six and a half per cent in exports of cars.

In volume terms (excluding oil and erratic items), imports of goods rose between September and October by two and a half per cent. Within manufactured goods there were rises of three per cent in imports of cars and capital goods. Imports of other consumer goods rose by six and a half per cent and of intermediate goods by four and a half per cent.

The latest data suggests the UK’s export performance continues to suffer from difficult trading conditions particularly in Europe.