Growing UK exports is becoming increasingly important following the Brexit vote, both for goods and services. With the risk of a cliff-edge break in market access between the UK and the EU, and the likelihood that access for services, especially financial services, will be constrained compared to today, we ask the question: ?How material are financial services to UK exports??

Last Tuesday, the ONS Pink Book 2018 gave us a strong indicator that services, and financial services in particular, help Britain prosper by generating needed export surpluses.

In spite of concerns relating to Brexit and trade tensions between blocks, both services and financial services exports have shown solid growth and, most importantly, have contributed strongly to offsetting the growing deficit in trade in goods (up 3.6 per cent year over year resulting in a trade deficit of £137bn). Services exports of £277bn resulted in a c. £110bn trade surplus, 9.6 per cent higher than last year.

Financial services exports were up by almost nine per cent year on year, reaching c. £60bn, of which c. £26bn was to the EU 27 and c. £23.6bn was to core non-EU markets including the USA (£14.4bn), Japan (£3.9bn), Switzerland (£1.9bn), Canada (£0.7bn), Hong Kong SAR (£0.6bn), Australia (£0.6bn), Norway (£0.5bn), Singapore (£0.45bn), China (£0.3bn) and India (£0.2bn).

More importantly, financial services registered a trade surplus of £44.4bn (40 per cent of the overall services trade surplus), of which £20.7bn was with the EU 27 and £23.6bn was with non-EU countries (of which £14.7bn was with the aforementioned key markets). This offseted 32 per cent of the trade deficit in goods and demonstrates both the sector's importance to the UK economy and the importance of the EU 27, US, Japan and Switzerland (to name but a few of its most significant export markets) in helping Britain prosper.

This highlights the need to protect as much as possible existing access for services and financial services to the EU 27 markets, including timely agreement of appropriate transitional and future relationship arrangements between the UK and the EU 27, and the potential that can be realised from enhancing access to core exporting markets in the rest of the world.