UK's Trade Gap Headache Grows as Car Exports Dip

Data from the Office for National Statistics confirms the UK's penchant for importing more than it exports is as alive as ever.

Data shows the trade balance stood at -£12.36BN in May, where markets had forecast a reading of -£12.0BN. However, the previous month's deficit was revised lower to -£12.40BN.

UK trade balance

The total UK trade deficit widened £5.0 billion to £8.3 billion in the three months to May 2018, mainly due to falling goods exports and rising goods imports says the ONS.

Falling exports of cars and rising imports of unspecified goods were mostly responsible for the £5.0 billion widening of the total trade deficit in the three months to May 2018.

According to the Society for Motor Manufacturers and Traders, car exports  dipped by 1.9% in May. The year-to-date figure of 705,603 cars built in the UK represents a 2.9% drop on the same period in 2017.

The decline in exports was meanwhile shown to have contributed to a continued decline in the UK's manufacturing sector in a separate GDP data release from the ONS, also out today.

Interestingly, there was a small overall trade surplus on the month to February 2018, mainly due to falling goods imports; the last time there was an overall trade surplus on the month was in February 2011.

ONS data reveals the UK imported 55% of its goods from the EU and exported 51% of its goods to countries outside of the EU in the 12 months to May 2018.