A fall in exports of fuels to the EU was mainly behind a 3.5% decline in the value of goods exports in February, freshly released data from the Office for National Statistics (ONS) shows.
Exports to the EU were down by £1bn (6.2%), with £0.9bn of this fall due to decreased crude oil exports to the Netherlands and France.
Exports of machinery and transport equipment also decreased by £100m in February, with non-EU exports down slightly by £100m (0.7%).
The value of goods imports decreased by £0.7bn (1.4%) with goods imports from the EU increasing by £0.4bn (1.5%), while those from non-EU countries fell by £1.1bn (4.5%).
This contributed to a widening of the total trade in goods and services deficit by £2.3bn to £23.5bn in the three months to February 2023.
‘A disaster’
The government data comes as new analyses from the Bank of England and the Office for Budget Responsibility (OBR) found that the UK’s exports of goods lag behind all other G7 nations, according to the FT .
Both institutions’ reviews suggest that the country’s exports may be even weaker than official sources anticipate.
ONS figures showed that in the last three months of 2022 UK export volumes (excluding precious metals) were more than 9% below the 2019 pre-pandemic average.
Sophie Hale, trade economist at the Resolution Foundation think-tank, described the performance as “a disaster” and said the drop in goods export volumes marked “a quite substantial fall and it really leaves the UK at the bottom of the G7 pack”.
Two more years
The OBR expects the weakness in the UK overall trade to continue for the next two years, with export volumes forecast to fall by 6.6% in 2023 and by 0.3% in 2024.
Business leaders have complained that post-Brexit obstacles to trading with the EU have left UK companies at a disadvantage.
GDP
The ONS also released its monthly GDP report, showing the UK economy stagnated in February after strikes hit output in the services sector, the Times reports.
Following growth of 0.4% in January, GDP is estimated to have shown no growth in February 2023, with falls in services and production offset by growth in construction, the ONS reported.
In the three months to February, GDP grew by 0.1%.
Recession avoided
However, chancellor Jeremy Hunt has said the UK will beat dismal growth forecast by the IMF which predicted the UK would be bottom of the G7 growth league table this year, reports Bloomberg.
“The economic outlook is looking brighter than expected - GDP grew in the three months to February and we are set to avoid recession thanks to the steps we have taken through a massive package of cost-of-living support for families and radical reforms to boost the jobs market and business investment,” he said.
However, shadow chancellor Rachael Reeves countered this, saying that the country was now “lagging behind on the global stage with growth on the floor.”
