New data released Friday by the UK’s Office of National Statistics showed the UK’s trade deficit with the EU set a new record high in the last quarter of 2022, due to increasing imports from the EU.
According to the report, the deficit in trade grew to £32.9 billion (almost $40 billion) in the final three months, It was the biggest deficit since the ONS began keeping records in 1997.
Imports from the EU, not including precious metals, jumped to £82 billion ($100 billion), an all-time high. Exports came in at £49.2 billion ($60 billion).
Imported goods rose by £1.6 billion ($2 billion) or 2.9% in December, as exports diminished by £800 million ($968 million) or 2.3%.
In December, British imports from the EU rose to a new high of £28.5 billion ($34 billion). The rise was attributed to an increase in purchases of transport equipment and machinery, in particular, ships from Germany, and fuel.
Gabriella Dickens, a senior UK economist at Pantheon Macroeconomics said in an interview with Bloomberg, “Brexit still is an important part of the picture, as it is continuing to hold exports back. In real terms, UK exports of goods – excluding erratics – were 9.4% below their 2018 level, before Brexit and Covid-19 impacted the data.”
Catherine Mann, a Bank of England policymaker, said earlier that Britain’s exit from the EU and the trade barriers which subsequently arose have been adding to the inflation crisis in the country. She added, “No other country chose to unilaterally impose trade barriers on its closest trading partners.”
Meanwhile, the data showed that the UK trade balance of goods and services with the whole world in December hit a record low of -£11.4 billion (-$14 billion) in December, on part due to higher gas prices.
