The UK’s trade deficit of goods is the widest it has ever been. In 2025, the country spent £248.3 billion more on things than it sold to the rest of the world.

This is not just some abstract number, of interest only to markets and economists. The UK’s trade deficit has practical consequences which help to explain why global events show up so quickly in people’s food and energy bills.

Nor is this a new situation. While the UK runs a strong surplus in services such as finance and professional consulting, it consistently imports more goods than it exports.

On its own, that is not necessarily a problem. Many advanced economies run trade deficits of goods. The more important issue is what a country imports, and how essential those imports are to daily life.

For example, the UK relies heavily on imports for many things that households cannot easily live without, such as 40% of the food they consume.

It imports much of its energy too – and although the UK produces some domestic oil and gas, wholesale energy prices are strongly influenced by international markets.

Food and energy are not optional purchases. Households cannot simply stop eating or heating their homes when prices rise. Economists describe these goods as “inelastic”, meaning that demand does not tend to fall even when........

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