Describing today’s trade figures from the ONS, David Slater, Director of Trade at KPMG UK said:
“Whilst UK GDP has grown steadily, we have seen a narrowing of the trade deficit. However, in the three months to June 2018, there has been a rise in goods imports and a drop in goods exports, resulting in the UK trade deficit increasing by £4.7 billion to £8.6 billion. The widening was seen in trade both with countries inside the EU and outside the EU. A rapid decline in the exports from the automotive and aviation sectors was one of the key factors in this, with the highest decrease in exports coming from the United States, followed by India and the United Arab Emirates. As investment in the automotive industry has more than halved over the past three years, this trend may continue through to the next quarter.
“Today’s figures come after 12 months of a narrowing trade deficit. The uncertainty caused by a looming trade war between the EU and the US, as well as a no-deal Brexit, may be responsible for a lower demand for British goods. Fluctuations in currency prices across the world could also be playing a hand in a more general slowdown of trade. Despite this, the UK’s services surplus grew by a further £0.7 billion thanks to falling imports of services and rising services exports.”
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