According to new data from the Office for National Statistics (ONS), exports of goods to the EU from the UK hit a record high of £16.9 billion in May. This is the highest level of UK goods exports to the EU since 1997, with data showing a £2.3 billion increase in exports in May.
In addition to an increase in exports, the UK also saw a similar increase in imports of £2.2 billion in the same month.
The increase in exports to the European Union is believed to have been directly caused by increased prices and rising inflation.
When the impact of inflation is removed from the data, UK exports to the EU peaked at £13.9 billion in May, the highest level since December 2020.
Jack Sirrett, Head of Dealing at Ebury, a financial services company, spoke about the new trade figures on City AM on Wednesday.
Mr Sirrett said: “The global inflation shock is pushing up the price of goods around the world and clearly increasing the value of trade going in and out of the UK.
“Exports to the EU reached the highest level since the ONS started the series of trade data, when the effect of inflation is taken into account.”
He added: “Higher inflation is affecting exports because of the increase in input costs such as labor and materials.
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Sirett continued: “The numbers also reflect the global nature of the current inflation shock.
“The euro has also struggled this year due to headwinds from the war in Ukraine, fears of a recession and the ECB’s slowness to raise interest rates.
“The weakening pound is also likely to dampen trade for many importers as the goods they want to bring to the UK become increasingly expensive, both due to inflation and the deteriorating exchange rate,” he added.