Sophie Hale
@sophiehale.bsky.social
Principal Economist leading on trade and intergenerational fairness at the Resolution Foundation.
The spotlight is on how UK goods exports are reacting to US tariffs — and so far, the answer is: pretty badly. But the quieter, equally important story is the cooling in services trade. Both shifts matter for the UK’s increasingly fragile trade mix, and must not be overlooked.
November 13, 2025 at 9:39 AM
The spotlight is on how UK goods exports are reacting to US tariffs — and so far, the answer is: pretty badly. But the quieter, equally important story is the cooling in services trade. Both shifts matter for the UK’s increasingly fragile trade mix, and must not be overlooked.
The fall in UK goods exports is broad-based as is the underperformance of UK exports to the US. Q2 + Q3 exports of chemicals, machinery & transport and misc. manufactures all fell more than 10% with the US, while cars exports to the US have plummeted by more than third vs 2024.
November 13, 2025 at 9:39 AM
The fall in UK goods exports is broad-based as is the underperformance of UK exports to the US. Q2 + Q3 exports of chemicals, machinery & transport and misc. manufactures all fell more than 10% with the US, while cars exports to the US have plummeted by more than third vs 2024.
However, it's not just a US story. Goods exports excluding the US also fell compared to last year - down 1.3% in Q2 + Q3 vs the year before.
And no clear benefits materialising (yet) from securing lower tariffs with the US than many of its other major trading partners.
And no clear benefits materialising (yet) from securing lower tariffs with the US than many of its other major trading partners.
November 13, 2025 at 9:39 AM
However, it's not just a US story. Goods exports excluding the US also fell compared to last year - down 1.3% in Q2 + Q3 vs the year before.
And no clear benefits materialising (yet) from securing lower tariffs with the US than many of its other major trading partners.
And no clear benefits materialising (yet) from securing lower tariffs with the US than many of its other major trading partners.
Turning back to the UKs goods exports performance, it is clear US tariffs are playing a role. Exports to the US have plummeted - 12% lower in Q2 + Q3 than the previous year. This looks worse than the relevant March OBR estimate (scenario 2) of a short-run 8% fall.
November 13, 2025 at 9:39 AM
Turning back to the UKs goods exports performance, it is clear US tariffs are playing a role. Exports to the US have plummeted - 12% lower in Q2 + Q3 than the previous year. This looks worse than the relevant March OBR estimate (scenario 2) of a short-run 8% fall.
Services exports have been the clear hero in the UK trade story post-Brexit. And so slowing services trade growth is worrying - average quarterly growth has been just 1% so far in 2025 vs 4% in 2024.
November 13, 2025 at 9:39 AM
Services exports have been the clear hero in the UK trade story post-Brexit. And so slowing services trade growth is worrying - average quarterly growth has been just 1% so far in 2025 vs 4% in 2024.
The value of Q3 goods exports fell 0.7% compared to Q2, and this was due to particularly weak non-EU trade which fell 1.5% (while exports to the EU were largely flat). Services trade growth was also relatively weak, with both imports and exports inching up around 0.2%.
November 13, 2025 at 9:39 AM
The value of Q3 goods exports fell 0.7% compared to Q2, and this was due to particularly weak non-EU trade which fell 1.5% (while exports to the EU were largely flat). Services trade growth was also relatively weak, with both imports and exports inching up around 0.2%.
The idea that the UK benefits is plausible — but unlikely, for two reasons:
1. It likely underestimates US capacity and intent to onshore, given other active policies to pull investment home.
2. UK firms need to believe these tariff advantages are lasting — a risky bet.
1. It likely underestimates US capacity and intent to onshore, given other active policies to pull investment home.
2. UK firms need to believe these tariff advantages are lasting — a risky bet.
November 6, 2025 at 11:54 AM
The idea that the UK benefits is plausible — but unlikely, for two reasons:
1. It likely underestimates US capacity and intent to onshore, given other active policies to pull investment home.
2. UK firms need to believe these tariff advantages are lasting — a risky bet.
1. It likely underestimates US capacity and intent to onshore, given other active policies to pull investment home.
2. UK firms need to believe these tariff advantages are lasting — a risky bet.
But the economy growing is not consistent with other estimates e.g. OBR suggests medium term GDP fall of 0.3 per cent which can only be partly offset by trade diversion (albeit on a slightly higher tariff input assumption).
obr.uk/economic-and...
obr.uk/economic-and...
EFOs - Office for Budget Responsibility
obr.uk
November 6, 2025 at 11:54 AM
But the economy growing is not consistent with other estimates e.g. OBR suggests medium term GDP fall of 0.3 per cent which can only be partly offset by trade diversion (albeit on a slightly higher tariff input assumption).
obr.uk/economic-and...
obr.uk/economic-and...
The UK’s relative strength makes sense: UK is heavy on unaffected services trade and lower goods barriers mean possible gains from trade shifts — cheaper imports once bound for the US and an export edge into the US market.
November 6, 2025 at 11:54 AM
The UK’s relative strength makes sense: UK is heavy on unaffected services trade and lower goods barriers mean possible gains from trade shifts — cheaper imports once bound for the US and an export edge into the US market.
As shown below, the UK has ended up with relatively low tariffs - our starting point was ok (we don't run a big goods deficit with the US) and the UK-US deal took off some of the sector-specific sharp edges. Only Canada faces lower tariffs by October.
November 6, 2025 at 11:54 AM
As shown below, the UK has ended up with relatively low tariffs - our starting point was ok (we don't run a big goods deficit with the US) and the UK-US deal took off some of the sector-specific sharp edges. Only Canada faces lower tariffs by October.
In 2018-20, median wealth among Britons in their 60s was 55 per cent higher in real terms than among those of the same age in 2006-08, whereas median wealth for those in their 30s was a third (34 per cent) lower.
November 4, 2025 at 8:45 PM
In 2018-20, median wealth among Britons in their 60s was 55 per cent higher in real terms than among those of the same age in 2006-08, whereas median wealth for those in their 30s was a third (34 per cent) lower.
This aligns with what my colleague
@simonpittaway
found in the UK, where wealth has also become much more unequally shared between young and old.
www.resolutionfoundation.org/publications...
@simonpittaway
found in the UK, where wealth has also become much more unequally shared between young and old.
www.resolutionfoundation.org/publications...
Inequality control • Resolution Foundation
The turbulent 2020s have had profound implications for household wealth in Britain: lockdowns pushed saving to unprecedented highs, asset prices surged and then tanked, and high inflation eroded the r...
www.resolutionfoundation.org
November 4, 2025 at 8:45 PM
This aligns with what my colleague
@simonpittaway
found in the UK, where wealth has also become much more unequally shared between young and old.
www.resolutionfoundation.org/publications...
@simonpittaway
found in the UK, where wealth has also become much more unequally shared between young and old.
www.resolutionfoundation.org/publications...
On the other hand, the average net worth of households under 35 slipped from 21 percent of the overall mean in 1983 to 17 percent in 2007 to 16 percent in 2022.
November 4, 2025 at 8:45 PM
On the other hand, the average net worth of households under 35 slipped from 21 percent of the overall mean in 1983 to 17 percent in 2007 to 16 percent in 2022.
So trade generally looking weak in August, with goods exports falling and services growth remaining weaker than last year.
October 16, 2025 at 11:41 AM
So trade generally looking weak in August, with goods exports falling and services growth remaining weaker than last year.
There has been a worryingly flatlining of the service sector output over the past couple of months. While services output covers a lot of untradeable sectors, weaker export growth is a particularly worrying signal of a struggling service sector.
bsky.app/profile/jame...
bsky.app/profile/jame...
If we look under the hood, the big concern is the flatlining of the service sector over the past couple of months that looks particularly worrying. Other sectors have been more erratic but the recent tendency has been for weaker manufacturing growth give global trade tensions.
October 16, 2025 at 11:41 AM
There has been a worryingly flatlining of the service sector output over the past couple of months. While services output covers a lot of untradeable sectors, weaker export growth is a particularly worrying signal of a struggling service sector.
bsky.app/profile/jame...
bsky.app/profile/jame...
By comparison, services exports growth has been much stronger since the start of 2024. However, 3m on 3m growth has also been tailing off since June, with growth in 2025 looking set to significantly underperform 2024.
October 16, 2025 at 11:41 AM
By comparison, services exports growth has been much stronger since the start of 2024. However, 3m on 3m growth has also been tailing off since June, with growth in 2025 looking set to significantly underperform 2024.
3m on 3m goods export growth has dried up in recent months after a strong start to the year - related to US tariff policy and rising global trade tensions. But it is clear goods exports growth has been generally weak across the last couple of year.
October 16, 2025 at 11:41 AM
3m on 3m goods export growth has dried up in recent months after a strong start to the year - related to US tariff policy and rising global trade tensions. But it is clear goods exports growth has been generally weak across the last couple of year.
The value of goods exports fell by 3.3% in August, driven by a substantial monthly fall in EU goods exports (down 5.3%). The value of imports was flat, with growth in EU imports matched by the fall in non-EU imports. But services trade, both exports and imports, grew in August.
October 16, 2025 at 11:41 AM
The value of goods exports fell by 3.3% in August, driven by a substantial monthly fall in EU goods exports (down 5.3%). The value of imports was flat, with growth in EU imports matched by the fall in non-EU imports. But services trade, both exports and imports, grew in August.
So overall July trade looked steady, but the big picture: already weak goods exports + high trade uncertainty = trouble. The extent to which the US deal can alleviate this is still to be seen.
September 12, 2025 at 7:39 AM
So overall July trade looked steady, but the big picture: already weak goods exports + high trade uncertainty = trouble. The extent to which the US deal can alleviate this is still to be seen.
But what is more worrying is that the weak goods performance this year is nothing new. UK goods exports have continued to considerably underperform the rest of the G7. With the UKs overall export performance buoyed by a much stronger services performance.
September 12, 2025 at 7:39 AM
But what is more worrying is that the weak goods performance this year is nothing new. UK goods exports have continued to considerably underperform the rest of the G7. With the UKs overall export performance buoyed by a much stronger services performance.