In response to official statistics released today which showed the UK ran a trade deficit of £3.5 billion in January 2016, the Institute of Directors has said that Europe will remain the UK’s largest trading partner, whether we vote to stay or leave in the referendum on the UK’s membership of the EU on 23rd June.
Allie Renison, the IoD’s Head of Europe and Trade Policy, said:
“Trade is one of the main battlegrounds in the EU referendum. It is important to stress that the UK’s large trade deficit with the EU does not, by itself, prove that Britain would be better off voting one way or another. Whether in or out of the EU, the basic fact is that Europe will be our largest trading partner for some time. This means our economy will continue to be intertwined with Europe’s and affected by weak demand in the Eurozone, even if we were outside the EU.”
“Britain’s trade performance continues to suffer in the face of this limp overseas demand and global uncertainty. With every passing month the government’s £1 trillion export targets looks increasingly out-of-reach and more reliant on factors, like the health of China and other emerging markets, well beyond the control or remit of the government.
“Services are key to improving Britain’s trade balance, so it is a slight concern to see exports still down on where they were 12 months ago. Exporters may have hoped that the fall in the value of the pound will have given them a boost. For now, with the euro also having depreciated and our service-dominated exports less influenced by currency movements than the textbooks suggest, this looks optimistic.”