UK trade: Sept 2016

UK trade shows import and export activity and is a main contributor to the overall economic growth of the UK. All data are shown on a seasonally adjusted, balance of payments basis, at current prices unless otherwise stated. This UK trade release provides the first estimate for a full quarter of data post the EU referendum.

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, the total trade deficit for goods and services narrowed by £1.6 billion to £11.0 billion. There was a £4.5 billion (6.1%) increase in exports of goods and a £3.1 billion (2.8%) increase in imports of goods; these increases were partially offset by a £0.1 (0.1%) billion decrease in exports of services and a £0.3 (0.7%) billion decrease in imports of services.

Between Quarter 2 2016 and Quarter 3 2016, the deficit on trade in goods narrowed by £1.5 billion to £33.2 billion. Exports increased by £4.5 billion (6.1%) and imports increased by £3.1 billion (2.8%).

Between Quarter 2 2016 and Quarter 3 2016, the UK’s trade in goods deficit with the EU widened by £0.4 billion to £23.8 billion as imports increased more than export. Between Quarter 2 2016 and Quarter 3 2016, the UK’s trade in goods deficit with countries outside the EU narrowed by £1.9 billion to £9.4 billion, attributed to an increase in exports (5.9%).

Between Quarter 2 2016 and Quarter 3 2016, the trade in services surplus widened by £0.2 billion to £22.2 billion, as exports decreased by £0.1 billion and imports decreased by £0.3 billion.

The UK’s deficit on trade in goods and services was estimated to have been £5.2 billion in September 2016, a widening of £1.5 billion from August 2016. Exports decreased by £0.2 billion and imports increased by £1.2 billion.

The deficit on trade in goods was £12.7 billion in September 2016, widening by £1.6 billion from August 2016. This widening reflected a decrease in exports of £0.2 billion to £26.1 billion and an increase in imports of £1.3 billion to a record £38.8 billion. There were increases in imports of ships, material manufactures, road vehicles and oil.

Short guide to UK trade

UK trade shows the extent of import and export activity and is an important contributor to the overall economic growth of the UK. Trade is measured through both imports and exports of goods and/or services. Data are supplied by over 30 sources including several administrative sources, HM Revenue and Customs (HMRC) being the largest.

This monthly release contains tables showing the total value of trade in goods together with index numbers of volume and price. Figures are analysed by broad commodity group (values and indices) and according to geographical area (values only). In addition, the UK trade statistical bulletin also includes early monthly estimates of the value of trade in services.

This bulletin focuses on trade in goods as it is easier to quantify and measure due to the coverage and comprehensiveness of the administrative data sources available. Trade in services is more difficult to measure, and source data are provided mainly on a quarterly or annual basis, principally from International Trade in Services survey. Monthly estimates are derived using this quarterly data; therefore, the data are less robust on a monthly basis compared with goods.

As more information becomes available on trade in services this bulletin will focus on the values, volumes and geographic breakdown on a 3-month cycle described below:

Our website

The UK trade methodology web pages can now be found on our website. These have been developed to provide detailed information about the methods used to produce UK trade statistics. Any recent user requested trade data are included on our website.

Understanding UK trade

We make every effort to provide informative commentary on the data in this release. Where possible, the commentary draws on evidence from other sources of information to help explain possible reasons behind the observed changes. However, in some instances it can prove difficult to draw out detailed reasons for movements; consequently, it is not possible for all data movements to be fully explained.

Trade statistics for any 1 month can be volatile. For that reason, it is recommended to compare the latest 3 months against the preceding 3 months and the same 3 months of the previous year.

When examining the trade in goods data, oil and “erratics” (which are high-value, low-volume products) are removed from some analysis as they can make a large contribution to trade in goods as a whole. Therefore we publish data inclusive and exclusive of these categories. We also provide a separate analysis of oil because it is subject to erratic price fluctuations and therefore volume data are provided in metric tonnes as well as value (£ billion).

Strengths and weaknesses of the data

Strengths

Quality of trade in goods data

The quality of the source data for trade in goods is high in terms of the timeliness, comprehensiveness and coverage, and this level of quality compares well internationally. The data are used across government, business and academia and feed into a number of other outputs and publications, including gross domestic product (GDP) and balance of payments. The Bank of England uses the total figures to make policy decisions, whereas government departments such as the Foreign and Commonwealth Office are interested in the individual country detail.

We have frequent communication with our suppliers to discuss quality, including regular meetings, telephone conversations and email correspondence. Service level agreements are in place to define the level of quality expected in the data received and these are reviewed annually. Data suppliers have their own internal quality assurance processes to meet the quality standards outlined in the service level agreements and we work closely with them to understand these. Suppliers are required to advise us of any changes to the collection or processing of the data to ensure our expectations are still met.

When data are received by the trade team we conduct our own initial quality assurance. Further quality analysis is then conducted at several stages of processing; this is detailed in a process map and quality assurance plan. If there are any quality concerns we work closely with the supplier to address these.

We have regular discussions with users on the quality of our data and provide comprehensive explanations of the terms, methodology and processes we use. Eurostat is an important customer influence and helps improve the quality of our data through task force meetings and by producing quality guidelines.

Timeliness of publications

The UK trade publication is very timely (generally 40 days after the period to which it refers), helping to inform policy and to assess UK economic performance.

Weaknesses

Quality and timeliness of trade in services data

Where trade in goods has 1 main data supplier, there are a large number of suppliers of trade in services data. Additionally, a number are voluntary, so it can be difficult to establish and maintain the same quality assurance processes and relationships with these businesses or suppliers.

Due to the collection methods and complexities of quantifying trade in services, data are less timely than trade in goods estimates. The data are processed quarterly, so monthly forecasts are made to provide a complete trade total.

Monthly volatility

Trade statistics for any one month can be erratic. For that reason, we recommend comparing the latest 3 months against the preceding 3 months and the same 3 months of the previous year. However, we also recognise the importance to users of an early estimate of trade therefore we continue to produce a monthly estimate.

UK trade National Statistics suspension

Due to a series of errors during 2014, the UK Statistics Authority suspended the National Statistics designation of UK trade on 14 November 2014. The Authority's reassessment of UK trade against the Code of Practice for Official Statistics has been completed. We are committed to meeting the requirements and regaining National Statistics status for UK trade as soon as possible and will keep users informed of progress.

One of the recommendations of the reassessment was to consult with users on the use of UK trade statistics. The results of our user engagement survey can be found on our website.

The UK trade development plan was published for consultation in March 2016. We are grateful for the responses received. As detailed elsewhere in this release, we are undertaking and applying ongoing improvements to UK Trade statistics in line with this development plan and to anticipate future demands. An updated UK Trade development plan will be published in December 2016; this will reflect the feedback received in the consultation in March, and new requirements identified with key stakeholders since then.

To provide feedback on this bulletin or the ongoing improvements, please contact us via email trade@ons.gov.uk.

UK trade re-assessment update

We have now addressed some of the requirements of the re-assessment of UK trade and are in the final stages of providing evidence on the remaining requirements. In doing so, we are working with the Assessment Team to evaluate whether any additional evidence will be required as a result of the independent review of UK economic statistics led by Professor Sir Charles Bean. We have invested more resource into improving and developing the UK trade statistics, which is supported by the UK Statistics Authority. While developing, and delivering against, our development plan, we will continue to work with the Assessment Team to regain National Statistics status for UK trade statistics.

In July 2016, improvements to seasonal adjustment were implemented which reduce the volatility in the implied deflator.

Due to user demand we have included a UK trade EU section which includes an EU exports, imports and percentages of world total table.

Definitions and explanations

A glossary of terms is published in the UK trade glossary and the UK Balance of Payments, The Pink Book 2016.

Nonmonetary gold

According to internationally agreed standards, nonmonetary gold held in allocated accounts is recorded as a good; therefore, gold of this type which is being stored as a financial asset is recognised under trade in goods when ownership changes between a resident and non-resident.

Data are collected by the Bank of England from the London Bullion Market on holdings of nonmonetary gold. Working alongside the Bank of England and the London Bullion Market Association, we have implemented a method for smoothing the source data, effectively minimising volatility whilst enabling the underlying trend of the gold market to be reflected in the trade balance.

Estimates for trade in nonmonetary gold still remain volatile compared with other commodities and, as such, it is classified under erratics.

Use of the data

UK trade is a main economic indicator due to the importance of international trade to the UK economy. It is also a very timely statistic, providing an early indicator of what is happening more generally in the economy.

In addition, it is a major component of 2 other main economic indicators: UK Gross Domestic Product (GDP) and the UK Balance of Payments. This means that there is a threefold potential for UK trade statistics to inform the government’s view of the UK economy, as well as the views of others, such as economists, city analysts, academics, the media and international organisations.

Notes on tables

Rounding:

The sum of constituent items in tables does not always agree exactly with the totals shown due to rounding.

Symbols:

.. Not applicable
- Nil or less than half the final digit shown

Quarterly analysis

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, the total trade deficit (goods and services) narrowed by £1.6 billion to £11.0 billion. The trade position reflects exports minus imports; the narrowing of the deficit reflected a greater rise in exports (3.4%) than the rise in imports (2.0%). Both total trade exports and imports reached record 3-monthly highs in Quarter 3 2016 of £136.2 billion and £147.3 billion respectively.

The deficit on trade in goods narrowed by £1.5 billion between Quarter 2 2016 and Quarter 3 2016 to reach a deficit of £33.2 billion. Exports of goods increased by £4.5 billion (6.1%) between Quarter 2 and Quarter 3 2016, to £78.2 billion. This increase was attributed to a £2.7 billion increase in unspecified goods, a £1.2 billion increase in fuels, a £0.7 billion increase in ships, a £0.5 billion increase in material manufactures, a £0.4 billion increase in electrical machinery and a £0.3 billion increase in cars to a record £7.8 billion; these increases were partially offset by a £1.4 billion decrease in exports of aircraft. Imports of goods increased by £3.1 billion (2.8%) to a record high of £111.4 billion, as imports of aircraft increased by £1.2 billion, oil increased by £1.1 billion, machinery increased by £1.0 billion, material manufactures increased by £0.8 billion and chemicals increased by £0.7 billion; these increases were partially offset by a £2.5 billion decrease in imports of unspecified goods, which includes nonmonetary gold.

Between Quarter 2 2016 and Quarter 3 2016, exports of goods to EU countries increased by £2.3 billion to £37.6 billion. This was mainly due to an increase in exports of fuels of £1.1 billion and small increases in most other commodities, with the exception of aircraft, which fell by £0.2 billion. Imports from the EU increased by £2.7 billion to a record £61.4 billion in Quarter 3 2016. This reflected increases in chemicals of £0.7 billion (to a record £11.0 billion), electrical machinery of £0.6 billion, oil of £0.4 billion and food and live animals combined of £0.3 billion (to a record £6.0 billion). These movements caused the deficit with the EU to increase by £0.4 billion to £23.8 billion.

Between Quarter 2 2016 and Quarter 3 2016, there was an increase in exports to countries outside the EU of £2.3 billion to a record high of £40.7 billion, this reflected an increase of £2.7 billion in unspecified goods (majority is nonmonetary gold), £0.6 billion in ships, a £0.3 billion increase in material manufactures, a £0.3 billion increase in machinery, a £0.2 billion increase in cars (to a record £4.4 billion) and a £0.2 billion increase in fuels; these increases were partially offset by a £1.2 billion decrease in aircraft, and a £0.4 billion decrease in chemicals. Imports from non-EU countries increased by £0.4 billion to £50.0 billion, with a £1.3 billion increase in imports of aircraft, a £0.6 billion increase in fuels and a £0.4 billion increase in material manufactures; these increases were partially offset by a £2.5 billion decrease in imports of unspecified goods, which includes nonmonetary gold.

Between Quarter 2 2016 and Quarter 3 2016, exports of services decreased by £0.1 billion and imports of services decreased by £0.3 billion, resulting in a widening of the trade in services surplus by £0.2 billion to £22.2 billion.

Monthly analysis

The deficit on trade in goods and services in September 2016 was £5.2 billion, compared with a revised deficit of £3.8 billion in August 2016, (previously published as £4.7 billion). The widening of the deficit reflects an increase in imports of goods between August 2016 and September 2016.

Between August 2016 and September 2016, total exports (goods and services) decreased by £0.2 billion (0.4%) to £45.4 billion; this decrease reflected a £0.2 billion (0.8%) decrease in the export of goods. Total imports (goods and services) increased by £1.2 billion (2.5%) to £50.6 billion over the same period, reflecting a £1.3 billion (3.6%) increase in the import of goods.

The deficit on trade in goods was £12.7 billion in September 2016, widening by £1.6 billion from August 2016. This widening mainly reflects an increase in imports. Imports of ships increased by £0.5 billion (to a record £0.6 billion), material manufactures increased by £0.5 billion, road vehicles increased by £0.4 billion and oil increased by £0.3 billion. These increases were partially offset by a £0.8 billion decrease in imports of aircraft.

Between August 2016 and September 2016, exports of goods to EU countries increased by £0.1 billion (1.1%) to £12.6 billion. Imports of goods from EU countries increased by £1.0 billion (5.0%) to record £21.3 billion in September 2016; there were increases in imports of machinery and transport equipment of £0.7 billion, food and live animals (combined) of £0.1 billion, oil of £0.1 billion and miscellaneous manufactures of £0.1 billion. These movements caused the trade in goods deficit with EU countries to widen by £0.9 billion, from £7.9 billion in August 2016 to a record deficit of £8.7 billion in September 2016.

Between August 2016 and September 2016, exports of goods to countries outside the EU decreased by £0.3 billion, reflecting a fall in ships and aircraft of £0.2 billion each and unspecified goods, which includes nonmonetary gold, of £0.2 billion. Imports of goods from countries outside the EU increased by £0.3 billion, reflecting rises in imports of material manufactures of £0.5 billion, ships of £0.5 billion, oil of £0.2 billion and miscellaneous manufactures of £0.2 billion. These increases were partially offset by a fall in imports of aircraft of £1.0 billion. These movements caused the trade in goods deficit with countries outside the EU to widen by £0.7 billion, from £3.3 billion in August 2016 to £4.0 billion in September 2016.

Following the EU referendum, the value of sterling fell sharply against a basket of currencies at the end of June and into July. In July 2016, the sterling Exchange Rate Index (ERI) was 6.6% lower compared with the average level in June 2016, and 15.0% lower compared with July 2015. In August 2016 and September 2016 the exchange rate showed some signs of stabilising. Sterling fell at a slower rate (1.3%) in August 2016, and experienced a slight appreciation of 0.4% in September 2016.

Figure 2 compares the level of export and import prices against the inverted sterling exchange rate. This shows that the recent depreciation has coincided with some upward price pressure on both export and import prices. This is discussed in detail in the October 2016 Economic Review, but a key consideration is the high proportion of trade, both exports and imports, where the transaction takes place in a foreign currency.

While there have been upward movements in trade prices in recent months, this follows a long period of deflation in trade prices, coinciding with gradual but persistent sterling appreciation. Despite the recent increases, trade prices remain below levels seen over the past 4 to 5 years. For example in September 2016 export and import prices were 3.9% and 5.1% below the average price level observed in 2013 respectively.

However, figure 2 only shows the aggregate movements for trade, there are different changes within the product and regional breakdown. For example, we separate out export and import prices into products traded with EU countries and those traded with non-EU economies. These show slightly different movements during both the appreciation throughout 2015 and the recent depreciation.

Figures 3 and 4 show the export and import prices for both the EU and non-EU, plotted against the change in sterling against the euro and US dollar respectively. This is likely to be the exchange rate that each set of price indices would be most affected by – recent analysis suggests that the majority of EU trade is undertaken in both sterling and euros, while the majority of non-EU trade is undertaken in dollars.

Figure 3: Export prices and import prices, EU countries

Source: Office for National Statistics

Download this image Figure 3: Export prices and import prices, EU countries

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Figures 3 and 4 show that sterling appreciated to a far greater extent with the euro compared to the dollar across 2015. For example in July 2015 sterling had appreciated by 20% against the euro, whereas it had depreciated by 0.5% against the dollar relative to 2013 levels. This coincided with slightly greater deflationary pressure on EU export prices relative to non-EU export prices.

Overall, the recent depreciation has put slightly more upward pressure on export and import prices for products traded with non-EU economies. Relative to 2013, non-EU import prices are 5.5% lower than 2013 levels, while EU import prices are 9.5% lower.

Figure 4: Export prices and import prices, non-EU countries

Source: Office for National Statistics

Download this image Figure 4: Export prices and import prices, non-EU countries

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Longer term perspective – UK trade with the EU

In 2015, exports of goods and services to the EU accounted for 43.8% of total exports. The proportion is closer to half for exports of goods (47.3%) and just under two-fifths (39.4%) for trade in services. The share of exports has fallen by more than 10 percentage points over the last 15 years.

Rotterdam effect

In this context you should note the “Rotterdam effect”, where goods initially exported to 1 country are subsequently re-exported to another country. This might overstate the share of exports going to a particular country, in this case the Netherlands and therefore overstate the share of exports going to the EU.

It is not possible to quantify this issue precisely, but an article exploring the Rotterdam effect was published in 2015. The article used 2013 data to estimate the effect, and made an assumption that 50.0% of all goods exports to the Netherlands were re-exported to non-EU countries. Using this assumption, the Rotterdam effect would account for around 4 percentage points of the UK’s exports of goods. These effects were calculated to illustrate the possible size of the Rotterdam effect. The Rotterdam effect applies only to trade in goods. The 4 percentage points estimate therefore applies to the share of the exports of goods only.

When considering the total exports of goods and services to the EU – the 43.8% figure quoted in Table 2 of the article – the Rotterdam effect is estimated at around 2 percentage points. It is also important to note that the Rotterdam effect could also affect the UK’s imports. However, these estimates were calculated to illustrate the possible size of the Rotterdam effect and do not imply that a different data series should be produced or used.

Quarterly analysis

In Quarter 3 (July to September) 2016, the deficit on trade in goods was £33.2 billion, narrowing by £1.5 billion from Quarter 2 (April to June) 2016.

Exports increased by £4.5 billion (6.1%) to £78.2 billion in Quarter 3 2016, compared with £73.7 billion in Quarter 2 2016.

In detail:

• unspecified goods (majority is nonmonetary gold) rose by £2.7 billion

• fuels rose by £1.2 billion

• ships rose by £0.7 billion

• material manufactures rose by £0.5 billion

• electrical machinery rose by £0.4 billion

• cars rose by £0.3 billion, to a record £7.8 billion

• aircraft fell by £1.4 billion

Imports increased by £3.1 billion (2.8%) to £111.4 billion in Quarter 3 2016, compared with £108.4 billion in Quarter 2 2016.

In detail:

• aircraft rose by £1.2 billion

• oil rose by £1.1 billion

• machinery rose by £1.0 billion

• material manufactures rose by £0.8 billion

• chemicals rose by £0.7 billion

• unspecified goods fell by £2.5 billion

Monthly analysis

In September 2016, the UK’s deficit on trade in goods was £12.7 billion, widening by £1.6 billion from August 2016.

Exports decreased by £0.2 billion (0.8%) to £26.1 billion in September 2016, from £26.3 billion in August 2016.

In detail:

• aircraft fell by £0.2 billion

• ships fell by £0.2 billion

• unspecified goods fell by £0.2 billion

• mechanical machinery rose by £0.2 billion

Imports increased by £1.3 billion (3.6%) to £38.8 billion in September 2016, from £37.4 billion in August 2016.

In detail:

• material manufactures rose by £0.5 billion

• ships rose by £0.5 billion, to a record £0.6 billion.

• fuels rose by £0.3 billion

• aircraft fell by £0.8 billion

At the main commodity level the data are shown in Table 3.

Where to find data about UK trade in goods

The value of trade in goods figures is available in Table 1 and commodity figures are available in Tables 8, 9 and 10 of the UK trade dataset.

In September 2016, the deficit on trade in goods with EU countries widened by £0.9 billion to £8.7 billion. The deficit on trade in goods with non-EU countries widened by £0.7 billion to £4.0 billion (Figure 7).

EU analysis

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, exports of goods to the EU increased by £2.3 billion (6.4%) to £37.6 billion. This was attributed to an increase in exports to the Netherlands of £0.9 billion, increased exports to Germany of £0.6 billion and exports to several other countries evidencing smaller increases.

Between Quarter 2 2016 and Quarter 3 2016, imports of goods from the EU increased by £2.7 billion (4.6%) to £61.4 billion. This was primarily attributed to an increase in imports from the Netherlands of £1.2 billion and increased imports from Germany and Belgium and Luxembourg (combined) of £0.6 billion and £0.4 billion respectively.

Between August 2016 and September 2016, exports of goods to the EU increased by £0.1 billion (1.1%) to £12.6 billion. This was attributed to an increase in exports to Germany of £0.2 billion and increased exports to France and Belgium and Luxembourg (combined) of £0.1 billion each, partially offset by a decrease in exports to Italy of £0.2 billion and decreased exports to the Republic of Ireland of £0.1 billion.

Between August 2016 and September 2016, imports of goods from the EU increased by £1.0 billion (5.0%) to £21.3 billion. This was primarily attributed to increases in imports from Germany and the Netherlands of £0.4 and £0.2 billion respectively, as well as increases in imports from Belgium and Luxembourg (combined), Poland and Denmark of £0.1 billion each.

At the commodity level, the data are shown in Table 4.

Non-EU analysis

Between Quarter 2 2016 and Quarter 3 2016, exports to non-EU countries increased by £2.3 billion (5.9%) to £40.7 billion. This was primarily attributed to an increase in exports to Switzerland of £1.4 billion, as well as increased exports to Australia of £0.6 billion and Norway of £0.5 billion and Singapore and United Arab Emirates of £0.2 billion each. These increases were partially offset by a fall in exports to Saudi Arabia of £0.8 billion.

Between Quarter 2 2016 and Quarter 3 2016, imports from non-EU countries increased by £0.4 billion (0.8%) to £50.0 billion. This was primarily attributed to increases in imports from the USA of £1.7 billion and Singapore of £0.6 billion, which were offset by decreased imports from Canada and Switzerland of £0.5 billion each, as well as South Africa of £0.4 billion and Turkey and South Korea of £0.3 billion each.

Between August 2016 and September 2016, exports of goods to non-EU countries decreased by £0.3 billion (2.5%) to £13.5 billion. This was primarily attributed to a decrease in exports to Australia of £0.4 billion, decreased exports to South Korea and Switzerland of £0.2 billion each, and decreases to other countries including Iceland, Saudi Arabia, Singapore and Russia of £0.1 billion each. These decreases were partially offset by a rise in exports to China of £1.1 billion.

Between August 2016 and September 2016, imports of goods from non-EU countries increased by £0.3 billion (1.9%) to £17.5 billion. This was attributed to increases in imports from Singapore of £0.5 billion and Norway of £0.3 billion, as well as increased imports from China and South Africa of £0.2 billion each. These increases were partially offset by a fall in imports from the USA of £0.9 billion.

At the commodity level, the data are shown in Table 5.

Where to find data about UK trade in goods – analysis by area

Trade in goods by area figures are available in Table 2 and value of trade in goods with selected EU and non-EU trading partner figures are available in Tables 11 and 12 of the dataset.

Quarterly analysis

In Quarter 3 (July to September) 2016, the USA was the UK’s top export partner with exports of £11.6 billion, decreasing by £0.4 billion when compared with Quarter 2 (April to June) 2016.

Germany was the UK’s top import partner with imports of £16.4 billion, increasing by £0.6 billion when compared with Quarter 2 2016.

Monthly analysis

The USA was the UK’s top export partner with exports of £3.9 billion in September 2016, a decrease of £31.0 million when compared with August 2016.

Germany was the UK’s top import partner with imports of £5.8 billion in September 2016, an increase of £0.4 billion when compared with August 2016.

Where to find data about UK trade in goods – geographical analysis

Trade in goods by area figures are available in Table 2 and value of trade in goods with selected EU and non-EU trading partner figures are available in Tables 11 and 12 of the UK trade dataset.

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, the volume of exports increased by 2.2%.

Between Quarter 2 2016 and Quarter 3 2016, the volume of imports decreased by 2.4%.

Between August 2016 and September 2016, the volume of exports increased by 1.7%.

Between August 2016 and September 2016, the volume of imports increased by 4.5%.

At the commodity level, the data are shown in Table 8.

In September 2016, compared with August 2016, export prices decreased by 0.3% and import prices decreased by 0.5%. Excluding the oil price effect, export prices decreased by 0.6% and import prices decreased by 0.8%.

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, export prices increased by 5.0% and import prices increased by 4.0%. Excluding the oil price effect, export prices increased by 4.7% and import prices increased by 3.4%.

For more commentary on the effect of sterling on trade prices, see the Economic Review: October 2016.

In Quarter 3 (July to September) 2016, the balance on trade in oil was in deficit by £2.1 billion, widening by £0.3 billion from Quarter 2 (April to June) 2016. Oil exports increased by £0.8 billion to £5.0 billion and oil imports increased by £1.1 billion to £7.1 billion.

In September 2016, the balance of trade in oil was in deficit by £1.0 billion, a widening of £0.3 billion from August 2016. Oil exports decreased by £24.0 million to £1.6 billion and oil imports increased by £0.3 billion to £2.6 billion.

Where to find data about trade in oil

The trade in oil figures are available in Tables 1 and 7 of the UK trade dataset.

Information on trade in services is mainly obtained from quarterly surveys, in some cases underpinned by larger annual surveys. This means that the latest months are uncertain.

In Quarter 3 (July to September) 2016, the surplus on trade in services was £22.2 billion; financial services was the largest contributor with a surplus of £10.1 billion.

Between August 2016 and September 2016, the estimated surplus on trade in services increased by £0.1 billion to £7.5 billion. Exports were estimated to have been £19.3 billion and imports £11.9 billion.

Between Quarter 2 (April to June) 2016 and Quarter 3 (July to September) 2016, exports of services decreased by £0.1 billion to £58.0 billion, the main contributors to this decrease were insurance and pension services (£0.2 billion), telecommunications, computer and information services (£0.2 billion) and government services (£0.1 billion). This decrease was largely offset by an increase in other business services of £0.5 billion. For the same period, imports of services decreased by £0.3 billion to £35.8 billion, the main contributor to this decrease was travel services with a decrease of £1.3 billion. This decrease was partly offset by an increase in other business services of £1.2 billion.

Where to find data about trade in services

The trade in services figures are available in Table 1 CONT. of the dataset.

A quarterly breakdown of trade in services by selected countries can be found in the Quarter 2 (April to June) 2016 United Kingdom Economic Accounts.

More detail on trade in services by type of service and partner county can be found in the annual UK Balance of payments, The Pink Book 2016.

Other regularly published UK trade releases

Supplementary quarterly data analysed by product according to the UK trade in goods by classification of product by activity (CPA 2008) are also available.

The latest release on 14 September 2016 covered the period Quarter 2 (April to June) 2016 and the data are fully consistent with the UK Balance of Payments – The Pink Book 2016 and UK National Accounts – The Blue Book: 2016 datasets.

Following an internal review of our publications and a wider survey of users there is no longer a statistical bulletin associated with the release, additional excel tables have been added with an EU and non-EU breakdown by product.

The complete run of data in the tables of this statistical bulletin is also available to view and download in other electronic formats free of charge using our time series data website service. You can download the complete statistical bulletin in a choice of zipped formats, or view and download your own selections of individual series.

The data in the UK Trade explorable datasets of this statistical bulletin are also available to view and download in other electronic formats free of charge using our website service. You can download the complete UK Trade explorable datasets in a choice of zipped formats, or view and download your own selections of individual series.

Recently published reports on UK trade topics

The Economic review: November 2016 published 3 November 2016 contains information on trade post-EU referendum and also the contribution of trade to gross domestic product (GDP).

On 28 October 2016, we published an article containing information on trade “Why has the value of the pound been falling and what could this mean for people in the UK?”.

On 5 September 2016, we published a short story on UK trade and investment relationship with the USA. This is part of a series which began in June 2015, previous topics cover South America, China and Africa.

On 29 July 2016, we published the annual UK Balance of Payments – The Pink Book 2016 which as well as containing more detailed information on trade also provided an overview of the trade deficit in relation to the current account deficit.

We have published a methodology article estimating the value of service exports abroad from different parts of the UK. This work has been undertaken to meet user needs for subnational estimates for exports of services. The article provides annual estimates for 2011 to 2014, including breakdowns by region, commodity and industry, which at this stage are considered experimental. We welcome feedback on the article and the proposed methodology.

The Economic Review: April 2016 published 6 May 2016 contains information on trade as a percentage of GDP.

The Economic Review: February 2016 published 3 February 2016 includes analysis of trade with EU and non-EU countries.

On 29 January 2016 annual International Trade in Services 2014 survey results were published. This release gives information on the industry of the businesses engaged in trade in services.

Historic articles published on UK trade

In our Economic Review: September 2015 published on 3 September 2015 there is further commentary on UK export performance.

On 1 September 2015, we published an article on the economic performance of the UK’s motor vehicle manufacturing industry.

On 26 June 2015, we published a short story on the importance of EU to UK trade and investment.

On 6 February 2015, we published an article on the Rotterdam effect and its potential impact on the UK trade in goods estimates.

On 23 January 2015, we published a short story exploring the reasons behind the UK trade deficit.

Published user requested data and analysis

Additional statistical data and analyses for UK trade statistics that have not been included in our standard publications are available at the user requested data and analysis pages on our website.

Methodological articles

Detailed methodological notes are published in the UK Balance of Payments – The Pink Book 2016.

Revisions

In this release, there are no revisions to trade in services, trade in goods is revised from July 2016, in-line with the National Accounts revision policy.

Between the August 2016 and September 2016 release, trade in goods has an upwards revision of £0.5 billion to exports and a downwards revision of £0.5 billion to imports in August 2016. The revision to exports is mainly attributed to survey data replacing the forecast for nonmonetary gold, causing an £0.5 billion upwards revision to non-EU countries. The revision to imports is attributed to a £0.5 billion downwards revision to imports of manufactured goods to EU countries.

Methodology changes

Change to the way HM Revenue and Customs trade in goods statistics are compiled

From June 2016 month of account there has been a methodological change to the way HM Revenue and Customs compiles non-EU statistics.

Following a change in legislation, non-EU trade in goods statistics have moved from the general trade system of compilation to the special trade system. In brief, special trade records the physical movement of goods to and from the UK, but excludes goods that are placed into customs warehouse where duty and Value Added Tax (VAT) has not yet been paid.

This change has had minimal impact on our trade in goods statistics as we previously applied adjustments to remove those goods held in customs warehouse from our data – the only change we have made is the removal of these adjustments

A full announcement on the Methodological change to UK Trade Statistics from HMRC is available on the HM Revenue and Customs website.

Trade in goods figures for the most recent months are provisional and subject to revision in the light of:

• late trader data

• revisions to seasonal adjustment factors which are re-estimated every month

Trade in services estimates have been derived from a number of quarterly and monthly sources. For components where no monthly data are available, estimates have been derived on the basis of recent trends. The results should be used with appropriate caution, as they are likely to be less reliable than those for trade in goods.

Reliability

Revisions to data provide one indication of its reliability. Table 9 shows summary information on the size and direction of the revisions that have been made to the data covering a 5-year period. A statistical test has been applied to the average revision to find out if it is statistically significantly different from zero. An asterisk (*) shows that the test is significant.

UK trade re-assessment

The UK Statistics Authority suspended the National Statistics designation of UK trade on 14 November 2014. The Authority's re-assessment of UK trade against the Code of Practice for Official Statistics has been completed.

One of the recommendations of the re-assessment was to consult with users on the use of UK trade statistics. The results of this user engagement survey can be found on our website.

UK trade re-assessment update

We have now addressed some of the requirements of the re-assessment of UK trade and are in the final stages of providing evidence on the remaining requirements. In doing so, we are working with the Assessment Team to evaluate whether any additional evidence will be required as a result of the Independent review of UK economic statistics, led by Professor Sir Charles Bean.

Trade development plan

The trade development plan was published for consultation in March 2016. We are grateful for the responses received. As detailed elsewhere in this release, we are undertaking and applying ongoing improvements to UK trade statistics in line with this development plan and also to address recent issues and anticipated future demands. An updated UK trade development plan will be published in December 2016; this will reflect the feedback received in the consultation in March, and new requirements identified with key stakeholders since then.

EMU enlargement

As of 1 January 2015, Lithuania joined the European Monetary Union (EMU). Therefore the EMU totals in this UK trade release include Lithuania.

EMU coverage

The coverage of EMU countries was extended to cover Cyprus and Malta from October 2008, Slovakia from January 2009, Estonia from January 2011, Latvia from January 2014 and Lithuania from January 2015. Some EU and non-EU breakdowns of commodity data for chained volume measures which are available on request may be less reliable than the current price data. Please consult Katherine Kent on +44 (0)1633 455829 if you are considering using them.

Data have been combined for the United States and Puerto Rico and for Dubai, Abu Dhabi and Sharjah (the United Arab Emirates) from January 2009 onwards. Estimates are separately available for the United States and Dubai up to the end of 2008 on request.

Erratics

Non-monetary gold is now included in the erratics series, along with ships, aircraft, precious stones and silver. In compliance with the BPM6 changes, non-monetary gold which is held as a store of wealth is now recorded within trade in goods.

Deflation

It is common for the value of a group of financial transactions to be measured in several time periods. The values measured will include both the change in the volume sold and the effect of the change of prices over that year. Deflation is the process whereby the effect of price change is removed from a set of values.

Chain-linked indices (chained volume measures), which are indexed to form the volume series in this bulletin, differ from fixed base indices in that the growth from 1 year to the next is estimated by weighting the components using the contribution to value of trade in the immediately preceding year (effectively re-basing every year). This series of annually re-weighted annual growths is then “chain-linked” to produce a continuous series.

The implied price deflators, derived by comparing current price data to chained volume measures data are not the same as the price indices published in this statistical bulletin, because the former are current weighted while the latter are base (2013) weighted.

Changes in trade associated with Value Added Tax (VAT) missing intra-community (MTIC) fraud mean that comparisons of volume and prices (both including and excluding trade associated with VAT MTIC fraud) should be treated with a great deal of caution.

Interpreting the data

In months where quarterly and 3-monthly ending percentage changes for index data coincide, there may be small differences between the data for methodological reasons. Quarterly data are the indexed form of an underlying constant price (for volume indices) or consistent quantity (for price indices) series. 3-month ending data are the average of the index data in that period.

Seasonal adjustment

Seasonal adjustment aims to remove effects associated with the time of the year or the arrangement of the calendar so that movements within a time series may be more easily interpreted.

The UK trade record information for September 2016 can be accessed on our website.