The UK's deficit on trade in goods and services narrowed in December to £4.4 billion. This compares with a deficit of £4.5 billion in November.
The surplus on trade in services was £1.7 billion in December, £0.2 billion higher than in November.
The deficit on trade in goods in December was £6.1 billion. This was £0.1 billion more than the deficit for November.
Following a change in the pattern of trading associated with Missing Trader Intra-Community (MTIC) fraud, identified by Her Majesty’s Revenue and Customs, interpretation of the breakdown between EU and non-EU trade is more difficult. Originally, most carousel chains only involved EU member states. More recently, there has been an increase in carousel chains that include non-EU countries, for example, Dubai and Switzerland. However, the import adjustment is applied only to EU imports as the goods return to the UK via the EU - but it is this part of the trading chain that is not recorded. Fraud, by its very nature, is difficult to measure reliably.
The deficit on trade in goods with the EU in December was £2.9 billion. This was slightly smaller than the deficit of £3.0 billion in November. Exports of oil to EU countries rose. Imports of consumer goods other than cars rose.
The deficit with non-EU countries widened to £3.2 billion from the deficit of £3.0 billion in November. Exports were little changed but there was a rise in imports of £0.3 billion. Exports of consumer goods other than cars rose while exports of capital goods and oil fell. There were increases in imports from non-EU countries of chemicals, and of fuels other than oil, offset partially by lower imports of oil and aircraft.
Excluding oil and erratic items, the volume of exports rose between November and December by one and a half per cent and the volume of imports rose by four per cent.
For the year as a whole, UK's deficit on goods and services rose to £47.6 billion – compared with a deficit of £39.0 billion in the previous year. Excluding oil and erratic items, the volume of exports was up by nine per cent and imports rose by six per cent.
Note: An article explaining the fraud and the impact on the trade figures was published in July 2003. You can access this article using the related link on the right hand side.