LONDON—The U.K.’s trade deficit with the European Union widened to a record level in January, according to official figures released Friday, even as the country’s global trade position improved.
The U.K.’s Office of National Statistics said that Britain’s goods deficit with the EU widened to a record £8.1 billion ($11.6 billion) in the first month of this year, as the U.K. sucked in more imports from its European neighbors, while Britain’s exports to the EU held steady. It was £7.4 billion in December.
The U.K.’s overall goods deficit narrowed to £10.3 billion in January from a revised £10.5 billion in December, official data showed, as the deficit with the world outside the EU improved.
Friday’s data comes amid a heated debate in the U.K. about whether it should leave the EU, ahead of a June 23 referendum on its continued membership. The EU is the destination for almost half of Britain’s annual exports of goods and services, and many economists warn that leaving the bloc could hurt trade and dent overall growth. Friday’s figures could bolster the case of those lobbying for Britain to remain because the U.K.’s growing imports from the continent could become more expensive if it had to pay tariffs on them if it left the single market.
But proponents of quitting the EU often point to the U.K.’s trade deficit with the rest of Europe as an indicator that other EU countries would have an incentive to agree to favorable trade terms with Britain if it left. In general, they argue that leaving would free the U.K. to ink fresh trade deals with faster-growing markets and other non-European nations, which could ultimately benefit British trade.