UK Economy - Why is the Trade Deficit Rising so Fast?

The UK economy ran a record trade deficit with the European Union in 2022 and the overall balance of trade in goods and services has worsened considerably in the last couple of years. Our latest short A-level and IB revision video looks at three possible reasons for the widening trade deficit.

Despite the UK’s exit from the EU single market, the EU accounted for 42% of UK exports of goods and services and 46% of imports in 2021.

In 2022, the value of imports from the EU rose 17% whereas the value of UK exports to the EU dropped by 6%. The trade deficit with the EU reached a record level.