UK trade gap narrows but EU deficit widens - ONS

The UKs trade deficit with the EU widened to a fresh record in February
The UKs trade deficit with the EU widened to a fresh record in February

Britain’s trade gap narrowed in February, according to official data, but its trade deficit with the EU widened to a fresh record ahead of the summer referendum.

The Office for National Statistics (ONS) said the UK’s trade deficit with the EU hit £8.6 billion in the month, and £23.8bn in the three months to January.

Both of these figures are the highest since the ONS began collecting this data in 1998, and beat the previous record EU monthly and quarterly deficits set in January of £8.1bn and £23bn respectively.

However, the overall deficit in goods with the world narrowed to £12bn - down from £12.2bn the previous month.

The ONS EU data will be argued over in the Brexit debate by Remain campaigners who say the UK’s trade with the EU is vital, and Leave campaigners who say Britain should focus on new fast-growing markets.

The EU accounts for around 50% of the UK’s exports, with Britain’s referendum on EU membership set for June 23.

In February, imports from the EU jumped 6.7% to a record £19.9bn, primarily lifted by goods from France, Germany and the Netherlands.

Over the same period UK exports to the EU lifted by 4% to £11.3bn, largely accounted for by goods shipped to Germany and Sweden.

The overall deficit in goods with the world in February narrowed due to an increase in chemical and pharmaceutical products, primarily taken by the US and Germany.

The UK has been one of the fastest-growing advanced economies in the world for the last couple of years, but this growth is based around retail spending, and economists have long argued for greater manufacturing and exports to better balance the economy.