| Actual | Previous | Revised | |
| Balance | £-14.45B | £-22.7B | |
| Imports - M/M | -0.6% | -3.4% | 0.7% |
| Imports - Y/Y | 3.6% | 6.2% | 3.5% |
| Exports - M/M | 6.7% | -3.2% | |
| Exports - Y/Y | -0.9% | -5.0% |
Highlights
The latest trade data suggest a short-term strengthening of the external sector, driven primarily by a surge in exports and a modest easing in import demand. In January 2026, the value of goods exports increased by £2.0 billion (6.7 percent), reflecting stronger demand from both EU and non-EU markets. At the same time, goods imports declined slightly by £0.3 billion (0.6 percent), mainly because of reduced imports from non-EU countries, although this was partly offset by increased purchases from the EU.
Despite the overall improvement, trade relations with the United States weakened during the month. UK exports to the US fell by £0.5 billion (11.3 percent), while imports from the US rose by £0.6 billion (12.4 percent), suggesting a short-term deterioration in the bilateral trade balance with one of the UK's key trading partners.
Looking at the broader three-month trend, the UK's external balance has improved noticeably. The overall trade deficit in goods and services narrowed by £5.1 billion to £1.8 billion, indicating a stronger contribution of trade to economic activity. This improvement reflects two developments, which are a reduction in the goods trade deficit to £56.6 billion and an expansion of the services surplus to £54.8 billion.
In essence, the latest trade figures reinforce the UK's continued structural reliance on services exports while highlighting gradual stabilisation in goods trade.
Definition
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.
Description
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.