Britain is selling less to Europe but the EU is still hugely important

Britain’s trade deficit – the gap between what the UK imports and exports – is now at its biggest since the financial crash in 2008. The latest figures out today show that the difference between the two is now £13.3bn for the first four months of 2016. That’s a jump from £12.2bn at the end of 2015. So what do the figures actually mean?

City analysts have described the trade deficit as ‘truly horrible’. The British Chambers of Commerce said the gap between imports and exports was ‘unacceptably large’. It’s not only those from the business world having their say on the latest figures though. As ever, these statistics are also being interpreted through the lens of the upcoming EU referendum. Vote Leave have said the stats show the EU is not working. Here’s what Matthew Elliott had to say:

‘The eurozone is collapsing, millions of people are unemployed and Europe’s economies are massively underperforming. That means that European countries are buying less from us than ever before as we trade more with the rest of the world’.

On one level, Elliott’s argument does stand up to scrutiny: it is true that Europe is buying less from the UK. After all, as the ONS figures show, the share of exports to the EU has fallen by more than ten per cent since 2001. But when you take a look at the numbers from the last five years, a different trend emerges which shows just how important Europe is as an import market for Britain. Since 2010, the amount of goods we’ve imported from the EU has jumped from 51.4 per cent of everything imported to 54.3 per cent. For services, it’s a similar picture: a rise from 48.5 per cent to 49.6 per cent in the last five years. And when you take both goods and services together, you see that the percentage of goods imported from the EU compared to the rest of the world has risen from 50.7 percent in 2010 to 53.1 percent in 2015. As with almost every thing about the Brexit debate, there is more than one side to the argument. Yes, Britain might be selling less to Europe than we did in 2000. But the most recent percentages show just how important the European Union still is as an overall market for Britain.