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UK goods trade deficit hits record high

10 February 2011 08:36 (UTC +04:00)

Baku - APA-Economics. Britainâ€™s goods trade deficit unexpectedly hit a record high in December, underscoring doubts about UK competitiveness, though the figures were worsened by bad weather and a tax-related jump in aircraft imports, Daily Times reported.

The data chime with a sharp fall in UK GDP at the end of 2010 and deal a further blow to hopes that exporters will be able to drive growth in 2011 when both the government and consumers are tightening their belts.

â€œThe deterioration in the UKâ€™s trade position in December probably partly reflects the bad weather, but the underlying trend is still pretty dismal,â€ said Vicky Redwood at Cap ital Economics.

The Office for National Statistics said Britainâ€™s goods trade gap widened to 9.25 billion pounds from 8.46 billion in November, its highest since monthly records began in 1980. Economists had forecast a broadly steady reading of 8.6 billion pounds.

There was little market reaction to the data, which is volatile at the best of times and unlikely to influence the outcome of Thursdayâ€™s Bank of England monetary policy decision. BoE policymakers are expected to leave interest rates at a record low of 0.5 percent â€” where they have stood since March 2009 â€” though the strength of recent inflation data has encouraged some in the market to bet on a rise.

December was Britainâ€™s coldest in one hundred years and heavy snow and ice heavily disrupted air and road transport. The statistics office said exports might have been hit harder by the weather than imports, though it noted some evidence that part of losses related to this were recouped before the month was over.