UK exports to the EU surge on weaker pound

The Dollar Business Bureau

UK’s merchandise exports surged in the first half of this year, due to a weaker pound and increase in sales to the EU countries.

UK’s imports are higher than the exports, leading to trade deficit of around €53 billion (£48 billion) during the first six months of this year in its trade with the EU bloc. However, the deficit dropped from €57.8 billion during the same period in 2016.

Due to a weaker pound, British-made products have become more competitive overseas, whereas imports have become more costly for companies and consumers in UK.

The exports of goods from Britain stood at €104 billion to the rest of the world, surpassing the €94.7 billion worth of exports to EU clients. However, the country’s imports from the EU bloc were €147.7 billion, while from rest of the world it stood at €134.7 billion.

The overall trade deficit of the country has come down to €83.7 billion this year compared to €102.2 billion during the first half of the previous year.

A yearly snapshot by Eurostat on international trade gives support to arguments that the EU countries depend highly on the UK market to meet its products demand but the British businesses depend on the trade with the EU bloc.

In June this year, Germany’s exports to UK stood at €6.8 billion nearly twice as much what it imported from Britain that is €3.6 billion, which leaves the UK with a trade deficit of €3.2 billion in the month with Germany.

France, the other member on the Brexit negotiations having the most influence, exported €2.9 billion worth of goods to the UK and imported around €2.7 billion, leading to a modest trade gap of €178 million.

Food and Drinks Federation (FDF) Director General Ian Wright said, “It is great to see such strong growth in our exports to the EU Member States. The EU remains an essential market for UK exports as well as for supplies of key ingredients and raw materials used by our industry. We believe there are significant opportunities to grow our sector’s exports further still.”