The shortfall in Britain's trade in goods in May was the widest in any month except last February, driven largely by a £521 million turn for the worse in the oil balance.
Export of crude and oil products held up well, but oil imports jumped by £518 million between April and May to £2.36 billion. This turned a £201 million surplus from April into a £320 million deficit.
National Statistics attributed the downturn to lower production coinciding with some stockbuilding of crude oil.
Overall, the combined deficit on trade in goods and services was £991 million higher than in April at £4.41 billion, despite a £194 million improvement on trade in services, which carried the month's surplus to £2.33 billion. Trade in goods alone worsened by £1.18 billion making the shortfall £4.41 billion in a month when imports hit an all-time record of £35.45 billion. The biggest single factor in this was a £236 million increase in imports of cars.
Total exports of goods fell by £135 million to £21.19 billion, while total imports of goods rose by four per cent to a record £27.94 billion.
Exports to EU countries fell by one per cent, while imports rose by 4.5 per cent. Sales to non-EU countries were unchanged, but imports were three per cent higher. NS repeated its warning that the continuing VAT "carousel" fraud is skewing the balance between EU and non-EU trade and the effect is even harder to estimate now that these activities have spread to non-EU countries including Switzerland and Dubai.
The EU tax commissioner, Laszlo Kovacs, warned yesterday that the fraud is wrecking Europe's VAT system, which needs to be overhauled to prevent criminals from stealing tens of billions of euros from EU governments.
On a three-monthly comparison the trend in Britain's trade looks less gloomy than the numbers for May taken on their own. Taking goods and services together, the deficit narrowed to £11.4 billion from £12.7 billion in December/February.