The wider deficit for the year as a whole was largely attributed to exports falling more significantly than imports did. The sharp drop in the price of Brent crude oil, which began in September and continued into January, helped to strengthen the trade balance to some extent as oil imports fell by more than oil exports. However, this narrowing of the trade deficit in oil was not enough to offset sharp declines in exports of other manufactured goods.

The weak performance of exports was felt with trade partners around much of the globe. In the final quarter of 2014 the value of goods sales to Eurozone members fell back by 0.5% year on year, and by 1.9% to the rest of the world. Exports to the US, one of the UK’s largest trading partners, declined year on year by 6.3%. In addition, growth in sales to China has been slowing recently, to just 0.8% year on year in the final quarter of last year.

This trend of weak overall trade performance is likely to continue this year. The Eurozone remains unlikely to see much of an acceleration in growth in 2015, particularly given the uncertainty being generated by the prospect of a Greek exit from the single currency area. In addition, economic expansion is expected to continue cooling in China over the medium term, weighing down on export prospects there.

Although Cebr’s overall forecast for the UK in 2015 is for GDP growth to remain broadly steady, largely due to domestic demand growth. Workers are expected to see their first significant increases in wages in real terms this year, as inflation drops to historic lows. While this will help to sustain economic momentum in the short term, expansion over the longer term will need to come from more sustainable sources such as exports and business investment.