Britain’s trade deficit – the difference between what we import and export – widened in the run-up to Brexit. Figures out today show that we imported £5.1bn more goods than we exported to the rest of the world. That gap widened by nearly £1bn between May and June, according to the ONS, in a picture which the Guardian have said is pretty ‘ugly’. But there is a flip side. Firstly, these figures don’t reflect anything about the referendum – they were compiled in the build-up to the June vote, so they tell us little about the impact of Brexit. Secondly, it’s worth mentioning that whilst the deficit has, indeed, got bigger, Britain’s exports also jumped in June by a billion pounds. That fact alone is worth celebrating. What’s more, a weaker pound will help narrow the deficit by making our goods cheaper to foreign buyers – which should increase exports over the coming months.
In the aftermath of the Brexit vote, as Britain decides what its trading relationship with the rest of the world will look like, there’s another, positive way of looking at these figures. Whilst it’s clear that Britain has a growing dependence on stuff from overseas, that means the UK is also growing in its importance as a marketplace for foreign goods. So although we couldn’t do without foreign cars and the like, nor too can those selling the goods do without Britain. As Ben Gutteridge, from investment firm Brewin Dolphin, says:
‘That the UK commands such an important share of European export..is considered to be an excellent platform from which to negotiate a favourable separation from the European Union.’
With Brexit still in its infancy and no sign of Article 50 on the horizon just yet, that should come as a big reassurance. We’ve heard rumours that some may try and punish Britain for Brexit. Today’s figures make it clearer that even if that desire did exist, for our European neighbours to act on that impulse would make no financial sense.