Britain's annual trade deficit and goods deficit widened in 2015, while exports and imports remained key drivers for the British economy, official figures released on Tuesday (9 February) showed.
According to data published by the Office for National Statistics (ONS), in the fourth quarter of 2015, the UK's deficit on trade in goods and services grew £1.8bn from the previous quarter to £10.4bn. The trade in goods deficit widened by £0.9bn to £32.7bn between the third and fourth quarter, an increase attributed to a £0.5bn decline in exports and a £0.4bn increase in imports, while the trade in services surplus narrowed by £0.9bn to £22.4bn over the same period.
"The UK is clearly not immune to a weaker external environment," said Paul Hollingsworth, UK economist at Capital Economics. "However, we think that concerns about a sharp global slowdown are somewhat overdone – indeed we think global growth will accelerate this year. What's more, the 5% or so fall in trade-weighted sterling since around mid-November should help exporters perform better in time.
Meanwhile, in the 12 months to 31 December 2015, Britain's annual trade deficit widened by £0.3bn to £34.7bn, while the goods deficit widened by £1.9bn to £125bn over the same period.
The increased deficit was partially offset by a gain in the services surplus, which rose by £1.5bn to £90.3bn, while the UK's deficit on trade in goods and services narrowed from £4.0bn in November 2015 to £2.7bn in December 2015,
The ONS attributed the narrowing to trade in goods where the deficit shrunk from £11.5bn in November 2015, to £9.9bn in December 2015. Between the last two months of 2015, the trade in goods narrowing was mainly the result of a fall in the import of goods from £34.7bn to £33.0bn, mainly reflecting a fall in imports of unspecified goods, which decreased by £1.0bn to £0.4bn