Against the backdrop of a warning from the Kiel Institute for the World Economy that conflict in the Red Sea, triggered by Israel's invasion of Palestine, has sunk container trade via the strategic route by more than 70%, the British Chambers of Commerce has been looking at the latest ONS trade data – and has warned of "significant challenges" for 2024.

William Bain, BCC Head of Trade Policy, said:  "The positives are there was a pick-up in some export sectors in goods trade with the EU, particularly in automotive sales. Services also remained steady for a further month, with only very small declines. But other indicators for November were weak, particularly on imports. "

He added: "Looking ahead the picture is only likely to worsen as the effects of the disruption to shipping in the Red Sea, and through the Suez Canal, begin to be fully felt."

The Kiel Institute's estimate of a global trade fall by 1.3% in December, due to the initial impact, was a cause for concern for British commerce interests, he said.

"These are stark numbers - the fall in containers taking this route, from the East, amounts to 300,000 per day. This suggests only 40% of normal sea freight traffic is currently travelling via the Red Sea. This is a significant challenge, especially when combined with the other global headwinds which traders are facing in the early weeks of 2024."

Beyond the conflict, there has been a steady performance for UK services exports in 2023 but the BCC said this latest data shows a further decline in UK trade in goods, for both imports and exports.

This is mainly due to a decline in trade flows with the rest of the world. The trade surplus in services declined slightly in the three months to November, but the trade in goods deficit widened slightly.

Overall goods imports volumes fell by 3.8% (£1.5bn) in November. The main falls in purchases from the EU were in machinery and transport equipment (including aircraft from Germany). Goods imports volumes from the rest of the world fell by 6.5% (£1.1bn), driven largely by lower sales of cars, electrical machinery and inorganic chemicals imports from China, and reduced imports of pharmaceutical and medicinal products from Switzerland. On the current prices measure goods import values from the EU fell by £0.5bn (1.7%), while the rest of the world saw import values drop by £1.1bn (5.4%) over the same period. Overall, goods imports fell by 3.3% (£1.6bn) on that measure.

For goods exports, volumes in November fell by 2.8% (£0.7bn). The BCC said that the significant falls in goods export volumes to the EU over the previous two months of 3.4% and 7% respectively saw a reversal in November, with a modest rise of 0.6% (£0.1bn). This was attributed to a rise in machinery and transport goods sales, including cars to Italy.

Goods exports volumes to the rest of the world meanwhile fell by 5.9% (£0.8bn), with lower exports of fuels (particularly crude oil) and material manufactures being the key drivers.

On the current prices measure, without inflationary effects being removed, EU goods export values rose by £0.2bn (1.2%) and non-EU goods fell by £0.8bn (5.0%). The combined figure shows goods exports falling in value by £0.6bn (2.0%).

On services, import and export volumes both fell slightly by £0.1bn. On the current prices measure, there were also slight falls in both import and export values of £0.1bn. Services exports in November were 12% higher, excluding inflation, than in February 2020.