UK trade deficit widens in fourth quarter of 2015

Imports and Exports | | MIC Customs Solutions |

Declining exports have resulted in the UK's trade deficit widening during the final quarter of 2015.

Global market turmoil has had an impact on Britain's international trade performance in the fourth and final quarter of 2015.

Data from the Office for National Statistics has shown that the UK trade deficit widened from £8.6 billion in the third quarter to £10.4 billion in the final three months of the year, raising fears that overall GDP growth will be harmed.

It means the country's good trade gap widened by £1.9 billion to a record high of £125 billion for the whole of 2015, despite strong service sector performance, record aircraft sales and a rise in overseas car sales.

A drop in chemicals exports and the long-term decline in North Sea oil were cited as key reasons for the widening trade deficit, as well as a slowdown in emerging market growth, driven in large part by decelerating economic momentum in China.

The strengthening of the pound has also been an issue, as it has devalued foreign sales and made UK exports more expensive for overseas customers.

Howard Archer, chief UK economist at IHS Global Insight, said: "UK exports have clearly struggled in recent months, as they have been hampered by sterling's overall strength in 2015, particularly against the euro, and moderate global demand."