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The UK's trade deficit hit a record £16.16 billion January, the Office of National Statistics said Friday.
The UK's international trade deficit widened from £2.34 billion in December. Exports slumped 8.3% from December in January, while imports surged 16%.
Its goods trade balance deficit widened to another record, hitting £26.45 billion in January from £12.35 billion in December. Market consensus, according to FXStreet, had predicted a £12.6 billion deficit.
Goods exports slumped 16% to £25.72 billion. EU exports dropped 22%, while non-EU exports were down 9.6%.
On the other hand, goods imports surged 22% to £52.22 billion, with EU imports up 26% and non-EU imports up 18%.
The ONS, however, said it has changed the way that UK imports and exports from the EU are measured and has cautioned about interpreting the new trade data with the EU.
‘As a result, our EU to Great Britain import statistics from January 2022 are not directly comparable with previous months. HM Revenue & Customs have assessed the impact of this change and are confident that the strong rise in imports from the EU this month is predominantly the result of genuine increases in trade rather than being attributed to the data collection change,’ the ONS said.
The UK imported £24.1 billion of goods from the EU in January and exported £11.6 billion in return.
Capital Economics Chief UK Economist Paul Dales said: ‘The ONS said that about £2 billion of the £3 billion fall in UK exports to the EU was due to a change in methodology that meant some exports to the EU are now being recorded later. Those £2 billion of exports will be recorded in February instead.’
The ONS noted it is now collecting imports data using custom declarations.
Dales added: ‘The ONS said this explained very little of the month-on-month surge in UK imports from the EU, but that sounds fishy to us. We'd be surprised if a lot of that move is not reversed in February. Even so, the bigger picture is that exports are still struggling to recover from Brexit and the pandemic.’
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