Britain’s trade gap with the rest of the world widened in the three months to July 2025, rising by £400mn to £10.3bn as imports outpaced exports, according to the latest data by the Office for National Statistics (ONS).
In the month of July, the value of goods imports jumped by £2.7bn, or 5.4%, driven by a rise in imports from both the EU and non-EU countries, the ONS said in a statement on 12 September.
In contrast, the value of goods exports increased by £1.9bn (6.6%) in July, boosted by a rise in exports to both the EU and non-EU countries.
While exports of goods to the US, including precious metals, rose by £800mn in July, they remain below their pre-tariff levels, the ONS said.
US imports of goods, including precious metals, decreased by £500mn during the same period due to a fall in imports of machinery and transport equipment, which the ONS linked to lower imports of aircraft.
After US President Donald Trump announced his “Liberation Day” tariffs on 2 April, the UK government signed a trade deal with the US, which came into force on 30 June.
The deal includes reducing the tariff on UK car exports to the US and removing the levy on UK aluminium and steel exports, the ONS said. All other commodities remain subject to the additional 10% blanket tariff on US imports.
“There have been considerable changes in the US international trade policy in recent months, which has posed challenges for UK businesses,” ONS said.
According to the ONS bulletin covering business insights and impact on the UK economy, published on 4 September, 33% of businesses with 10 or more employees that had exported goods in the past 12 months reported they were impacted by US tariffs in August.
The trade in goods deficit also widened by £3bn to £61.9bn in the three-month period to July, while the trade in services surplus is estimated to have grown by £2.6bn to £51.6bn.
Meanwhile, the UK economy failed to grow in July, with new ONS data showing that gross domestic product (GDP) was unchanged compared with June’s 0.4% growth. However, over the three-month period to July, real GDP grew by 0.2%, it added.
Services and construction output increased in July by 0.1% and 0.2%, respectively, but was offset by a 0.9% fall in production output, the ONS said.
“The business landscape remains challenging, particularly for SMEs, with cost pressures impacting investment, recruitment and trade,” Stuart Morrison, research manager at the British Chambers of Commerce, said in a statement in response to the latest GDP data.
Meanwhile, the National Institute of Economic and Social Research (NIESR) has forecast that the UK economy will grow by 0.4% in the third quarter of 2025.
“GDP showed no growth in July, reflecting a stagnant month for services and a contraction in production,” Fergus Jimenez-England, an associate economist at NIESR, said in a statement.
“Economic activity in the third quarter will be constrained by fiscal uncertainty weighing on household and business sentiments.”