UK’s trade deficit widens to record £27.9bn as business with Russia reaches historic low

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New data showed this morning that UK’s trade deficit in goods and services widens again in Q2 to a record £27.9bn.

Moreover, monthly imports from Russia dropped to meagre £33m, the lowest since records began and down from over £1.8bn in both January and February of this year.

Also during Q2, imports increased by £14.3bn to £206.6bn but exports rose by £12.3bn to £178.6bn.

The trade in goods deficit widened by £1.5 billion to £62.6bn during the second quarter.

Discussing today’s data, Jack Sirett, Head of Dealing at financial services firm Ebury, said that “with economic growth going into reverse in June and the Bank of England warning of a long recession amid a weakening pound and inflation burning hot, the continued growth of the UK’s trade deficit in goods and services is yet another flashing light for our economic health.”

He added: “Today’s figure represents a further record trade deficit figure. Stronger performance in the manufacturing and export of goods, in particular, is needed to start improving the UK’s trade performance.”

On Russia, Sirett said that “the sharp drop in imports and exports with Russia are further proof of the effectiveness of the government’s actions in tandem with global partners in strangling Russia’s economic growth.”

“As the war continues to drag on, businesses both in and out of Russia continue to adapt their supply chains in an attempt to normalise activity but there is no doubt there will be serious ramifications throughout the near-, mid- and long term,” Sirett concluded.