The UK trade balance posted a £1.96 billion deficit in February 2025, a significant shift from the revised £0.30 billion surplus recorded in the previous month. This marked the first trade deficit since November 2024 and reflected a widening gap between the country's rising imports and relatively slower export growth.
UK trade balance swings to deficit
Exports grew 0.2% month-on-month, reaching a 27-month high of £76.24 billion, signaling that demand for UK goods remained relatively strong. However, imports grew more sharply by 3.2%, reaching an eight-month high of £78.19 billion, driven by a notable increase in demand for foreign products, particularly machinery and aircraft.
Breaking down the export performance, goods exports edged down by 0.1%, reflecting a slight overall contraction in trade. Exports to non-EU countries remained stable, with some notable variations in the specific categories of goods. There were declines of £0.6 billion in exports of material manufactures and £0.3 billion in miscellaneous manufactures, which were largely offset by increases of £0.3 billion in exports of machinery and transport equipment, as well as fuels. Despite the overall dip in goods exports, the UK’s export of fuels was a bright spot, reflecting continued global demand for energy resources. Exports to EU countries also stayed stable at £14.01 billion, indicating that trade with the bloc has not been significantly impacted by recent economic uncertainties or shifting post-Brexit dynamics.
Services exports saw modest growth
In contrast, services exports saw modest growth, increasing by 0.4%, which was a positive development given the more volatile performance of the goods trade. The services sector continues to be a key area of strength for the UK economy, particularly in financial services, technology, and creative industries.
On the import side, goods imports rose significantly by 5.2%, with non-EU imports growing by 5.8%. A notable contributor to this increase was a surge in imports of aircraft from the United States, reflecting strong demand for U.S.-made goods, while imports from the EU climbed by 6.1%, driven primarily by increased imports of machinery and transport equipment, including cars from countries such as Germany, Spain, and Belgium. This highlights the UK’s continued reliance on the EU for a variety of goods, particularly in the automotive and industrial machinery sectors. By contrast, service imports fell by 0.6%, reflecting a slight slowdown in the demand for foreign services, potentially due to shifting global economic conditions.
Data indicative of the UK's ongoing trade imbalances
The widening trade deficit is indicative of the UK's ongoing trade imbalances, as the growth in imports outpaced exports. This imbalance could pose challenges for the UK’s economic recovery, particularly if the trend continues, although the strong performance in services exports provides a cushion. Analysts will be watching the trade balance closely in the coming months to assess whether this is a temporary fluctuation or a longer-term trend that might affect the country’s overall economic performance. Additionally, continued global uncertainties, particularly in trade relations with both the EU and non-EU partners, will likely influence future trade dynamics.
