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London’s financial services boost disappointing UK export figures

Export figures released by the Office of National Statistics (ONS) today have demonstrated the value of London’s financial services sector to the UK’s exports.

The ONS figures showed that the trade deficit for goods, the gap between what the country exports and what it imports, hit a record high of £125bn last year, beating the previous record set in 2014 of £123.1bn.

However, the £90bn trade surplus from financial services, the majority of which comes from the City of London, meant the total export deficit stood at a slightly less eye-watering £34.7bn.

The last decade has seen a financial services sector boom in the UK which has almost doubled in value since 2005. Last year, the UK became the world’s biggest net exporter of financial services ahead of traditional financial centres in the US and the Far East.

Despite this, the figures still made grim reading for policymakers with December the third consecutive month of export stagnation, along with overall export of goods falling by £8.1bn for the year compared to 2014.

Commenting on the ONS figures, Steve Everett, head of product and proposition for Lloyds Bank Global Transaction Banking, believes pressures abroad are inevitably pushing the numbers down. He said: “Weakening growth in the Eurozone and in markets such as China undermined exports towards the end of 2015, with these figures marking the third consecutive month of falling exports.

“The turbulence in international markets during January will also provide further headwinds for next month’s figures as well.

“But the overall, longer-term picture is not as negative as it may first appear. Although the underlying trend throughout 2015 was a fall in total exports of £1bn, that was largely due to a £9.8bn fall in exports of oil to other EU countries.

“The picture for other businesses, and particularly those in services - where exports grew £7.1bn during 2015, or exporting outside the EU, is more positive.

“Supporting these businesses, and especially first time exporters, will be crucial if Britain is to boost exports and narrow the overall trade deficit.”