The September 2025 trade figures reflect a challenging period for the UK's external sector. Goods imports fell by £1.0 billion (2.0 percent) over the month, driven by declines in trade with both EU and non-EU partners. However, exports performed even more weakly, dropping by £1.7 billion (1.2 percent) over the month, signalling reduced international demand and competitiveness pressures. A notable fall occurred in exports to the United States, which declined by £0.5 billion (11.4 percent) and reached their lowest level since early 2022, partly linked to reduced shipments of precious metals.

Over the year, imports rose sharply by 7.2 percent while exports fell by 0.6 percent. This deterioration in the overall trade balance resulted from rising total imports alongside falling total exports, creating an unfavourable trade balance. The goods trade deficit expanded by £3.0 billion to £59.6 billion, reflecting persistent structural weaknesses in the UK's manufacturing export base. In contrast, the services sector continued to act as a stabilising force, with the services trade surplus increasing slightly to £54.0 billion.

Overall, the figures suggest growing strain on the UK's trade position, with weakening export performance overshadowing modest resilience in services. This latest update takes the RPI and RPI-P to minus 8, meaning that economic activities are within expectations of the UK economy.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Data are supplied by over 30 sources including several administrative sources, HM Revenue and Customs (HMRC) being the largest.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in the UK. Exports show the demand for UK goods in countries overseas. The pound sterling can be particularly sensitive to changes in the trade deficit run by the United Kingdom, since the trade shortfalls create greater net demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.

The UK's trade balance is particularly susceptible to swings in the oil account and so within the overall goods balance, financial markets will normally focus on the balance excluding oil and other erratic items.