UK exports now comprise only 40% of goods
UK Financial Services Exports Remain a Key Strength Amidst Shifting Trade Landscape
The UK's exports of goods and services reached an estimated £873 billion in 2024, with a significant trade surplus in services helping to offset a sizeable goods trade deficit. According to data from TheCityUK, financial and professional services form a major component of this services surplus, underlining the UK's position as a global financial hub.
Financial Services Exports: A Pillar of Strength
The UK government's strategy and data highlight ongoing support and growth in financial services exports. The UK Export Finance (UKEF) department, which supports exporters including financial services firms, issued around £14.5 billion in new business in 2024-25. This financial backing provided by UKEF has contributed to an estimated economic impact of up to £5.4 billion GDP and supported approximately 41,000 jobs.
Strategic initiatives have been launched to further bolster the competitiveness of UK financial services firms on the global stage. These include the introduction of new financial products, such as the Early Project Services Guarantee, and commitments to support exporters in emerging sectors like critical minerals supply and defence.
Services Dominate UK Exports
Services now account for a record 59.2% of UK exports, with goods accounting for a record low 40.8%. This shift towards services becoming more prominent in the UK's export mix is reflected in the sector's contribution to the UK's GDP, which currently stands at around 80 percent.
The government has prioritized services, particularly financial services, in its industrial strategy. Labour has pledged to make the Square Mile the world's most innovative full-service financial center by 2035. Despite challenges such as tax hikes, dips in employment, and a broader UK economy shrinkage of 0.3 percent in June, the UK services sector expanded.
Overall Trade Picture
However, the analysis does not suggest a significant increase in overall UK trade volumes compared to other major economies. Since 2023, the value of goods exports has been falling by 5.4% each year, with the value of crude oil exports decreasing by 32 percent. This has affected overall figures, but the UK's services sector has proven resilient.
In terms of broader economic context, the UK economy is forecasted to grow by about 1% in 2025, with business investment notably strong early in the year, which could positively influence export capacity including in services like finance.
In conclusion, UK financial services exports remain a strong contributor to the UK’s overall trade surplus in services, backed by active government financial support mechanisms and strategic initiatives to maintain and grow competitiveness on the global stage.
1. The UK's financial services sector, a key component of its services surplus, continues to be a pillar of strength in the economy, with the government's active support and strategic initiatives bolstering its competitiveness in global markets.
2. Amidst the shifting trade landscape, the UK's financial services exports, underpinned by the government's financial backing and innovative initiatives, are expected to contribute significantly to the country's projected 1% economic growth in 2025, thereby reinforcing the UK's position as a global finance hub.
