Exports to EU surge on weak pound as trade deficit narrows

BRITAIN’S factories benefited from a surge in sales to the EU in the first half of this year as export growth outstripped imports. The UK still imports far more than it exports, with a goods deficit amounting to €53bn (£48bn) for the six months to June in its trade with the EU, but that is down from €57.8bn in the same period of 2016.

A weaker pound means Britishmade goods are more competitive abroad, while imports are more expensive to UK companies and consumers. The UK’S total global trade deficit has shrunk from €102.2bn in the first half of 2016 to €83.7bn this year.

The trade snapshot, published by Eurostat, lends weight to arguments that the EU depends heavily on Britain’s market for its products but also indicates that UK business relies on trade with the bloc. The British trade deficit could give leverage to Brexit negotiators who travel to Brussels for the third round of talks next month. This week the Government published a paper calling for trade to remain as frictionless as possible.

Britain sold more goods to Ireland (€1.9bn) than it imported (€1.2bn). Preserving the “invisible border” between Northern Ireland and the Republic of Ireland will be discussed by Brexit negotiators in the week of Aug 28.