UK services companies have reaped the rewards of the widespread global economic upturn, a close examination of the country’s international trading has revealed.
Overall, UK exports increased from £39.3bn to £43.3bn, a growth rate of 10.1pc, in the final three months of 2017, according to the Office for National Statistics.
The EU drove the bulk of the £3.9bn increase in UK exports. Exports to the bloc grew by 8.7pc and made up 3.3 percentage points of the 10.1pc total growth.
For the whole of 2017, UK services exports are estimated to have been worth £158bn, excluding areas such as banking and travel, compared to £78bn of imports.
On a country-by-country basis, the US remains the single largest export market for UK services firms. Ireland replaced Germany in second place, as it fell to fourth. The Netherlands came in third. Ireland alone accounted for £3.4bn worth of services exports in the final three months of last year, compared to £9bn to the US.
The EU accounted not only for the largest share of exports with the UK, but for also trade in UK imports. The bloc accounted for 40.3pc of the UK exporting activity and 41.8pc of UK imports in the last three months of 2017.
North America, including the US, generated around half as much trade in services as the EU, with 21.8pc of UK exports and 23.8pc of its imports.
While the EU dominated the growth in exports, the biggest growth in imports to the UK came from Asia.
Mike Bell of JPMorgan said the data “highlights and emphasises the importance of getting a comprehensive deal in services [with the EU post-Brexit]. That’s going to be a challenge given some of the Government’s red lines”.
David Henig, a former senior UK trade official and UK director of the European Centre for International Political Economy, said the figures showed the importance of protecting the UK’s surplus in trade in services.
As the UK leaves the EU, trade policy will need to focus on how to maintain the surplus and protect the UK’s position in the EU market, while also finding new opportunities for trade outside the EU, Mr Henig added.
The ONS also published exports and imports of goods by 234 partner countries and 125 different commodities for the first time as part of a dramatic overhaul of how it monitors UK trade.
The analysis, based on 2016 data, showed that the five most important export markets for UK goods were the US, Germany, France, the Netherlands and Ireland. By contrast, UK consumption relied most on imports from Germany, followed by China and the US.
In total, UK goods exports were worth £300bn in 2016, compared to £434bn in imports.
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