| Actual | Previous | |
| Balance | £-20.97B | £-23.01B |
| Imports - M/M | -1.1% | -0.6% |
| Imports - Y/Y | 5.3% | 9.1% |
| Exports - M/M | 4.4% | -6.4% |
| Exports - Y/Y | 4.3% | 9.3% |
Highlights
The UK’s external trade position improved in July 2026, supported by stronger exports and weaker imports. The value of goods exports increased by 4.4 percent, reflecting higher sales to both EU and non-EU markets. This broad-based expansion suggests improved overseas demand and greater geographical resilience in UK export performance.
Conversely, goods imports declined by 1.1 percent. Although purchases from non-EU countries increased, this was insufficient to offset the reduction in imports from the EU. The simultaneous rise in exports and fall in imports contributed to a £2.04 billion narrowing of the total goods and services trade deficit, which stood at £20.97 billion.
Annual import growth slowed from 9.1 percent to 5.3 percent, while export growth declined from 9.3 percent to 4.3 percent. Although this suggests easing momentum in the value of trade, exports performed more strongly than imports on a monthly basis. This represents a welcome improvement, but the sizeable remaining deficit indicates persistent structural dependence on imported goods and services. Indeed, these figures represent a positive monthly adjustment annually, although the remaining sizeable deficit indicates continued structural dependence on foreign goods and services.
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.