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In the fourth quarter of 2015 the UK economy grew 0.6%, which is higher than the previous estimate of 0.5%.

According to the Office for National Statistics (ONS), the economy grew by 2.3% for the whole of 2015. This is higher than the 2.2% previously thought. Analysts forecast that the figure would remain unchanged.

The figures for the UK’s current account deficit were at a record high in the final quarter of last year. In the three months to December it was £32.7 billion, which is the equivalent of 7% of GDP.

Considering the whole of 2015, the deficit was £96.2 billion or 5.2% of GDP. Since records began in 1948, both figures were the highest since. As a result, the deficit means that the UK imported more goods and services than it exported.

The Bank of England’s Financial Policy Committee stated that uncertainty over the UK’s membership of the EU could put financial stability at risk. This includes the current account deficit.

The Office for National Statistics (ONS) recently published a report about the importance of the European Union (EU) to UK trade and investment along with supporting graphs and figures.

The European Union (EU) was first formed in 1993 and over this period of time, it has become larger than any individual economy in the world. Its Gross Domestic Product (GDP) surpasses even the USA’s, this happened in 2003, which was the first time since 1998. Growth in the non-EU economies has outpaced growth of EU economies, which means that the EU’s share of global GDP has fallen to 24% in 2013, from 30% in 1993. However, this was largely driven by such strong growth in the BRIC (Brazil, Russia, India and China) economies.

In 2014, the EU accounted for a total of 44.6% of UK exports of goods and services as well as 53.2% of UK imports of goods and services even though there have been changes in the composition of the global economy. The UK has traditionally had strong trade links with the EU and the rising economic growth in other developing economies outside of the EU has therefore, resulted in non-EU economies growing and becoming more important to UK trade.

Between the years of 1999 and 2014, exports from the UK to EU and non-EU countries have grown, on average, by 3.6% and 6.5% respectively. The EU has fallen down with UK exports from 54.8% in 1999 to 44.6% in 2014 and this is because of the stronger export growth to non-EU countries. The good news is that the growth in value of UK imports of goods and services from EU and non-EU countries is still growing; the average growth is between 4.7% and 5.5% respectively in each year since 1999.

The UK’s overall trade balance with the EU is gradually deteriorating because of the faster growth in the value of UK imports compared to exports with the EU. The trade deficit has widened and reached £61.6 billion in 2014 compared with £11.2 billion in 1999. This is a big difference and over time, the question begs whether this could rise again.

Goods that were imported by the UK from the EU have risen by 4.9% per year on average and this can be compared to exports, which have risen by 2.5% per year and therefore, this caused the UK’s trade in goods deficit with the EU to rise to £77.0 billion. This shows how goods and services largely dominate UK trade with the EU and in 2014 the ONS found that trade in goods represented close to two-thirds of all UK exports to the EU, as well as over three-quarters of total UK imports from the EU.

The UK’s trade in services balance with the EU is quite favourable as it has continued to run a surplus in each year since 2005, which reached £15.4 billion in 2014. Services exports have played a big role in the growth of UK exports of goods and services to non-EU countries, as they have grown at a faster rate than imports. Over the past three years, the UK has run an overall trade surplus with non-EU countries and it has reached £27.8 billion in 2014.

Find the full report here.