UK trade deficit widens in October as imports jump

 
Chris Papadopoullos
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Container Ships Unload At Tilbury Port
There was a steep rise in the amount of goods imported in October (Source: Getty)

The UK's trade deficit, the amount of goods and services imported over the amount that is exported, widened in October.

The figures published by the Office for National Statistics this morning show the deficit widening to £4.1bn from £3.1bn in September.

An increase in goods imports, which economists warn are volatile on a month basis, were the main reason for the increase in the deficit. Imports of goods climbed to £35.4bn while exports decreased to £23.5bn.

Exporters has faced a number of challenges over the past year with the pound rising against the euro, making exports more less competitive in the the Eurozone, the UK's biggest export market. Weak economic growth overseas has also been a hindrance.

Paul Hollingsworth, UK economist at consultancy Capital Economics, said:

October’s dismal UK trade figures provided further signs that the economic recovery has remained worryingly-unbalanced in the fourth quarter.

Granted, we would take the monthly trade figures with a generous pinch of salt. After all, they are extremely erratic, prone to significant revision and in fact last year had their status as official national statistics suspended due to a string of errors

However, Hollingsworth said the recent renewed drop in oil prices may help narrow the deficit toward the end of the year.

"Of course, it’s early days yet and trade could improve over the last two months of the year. The recent fallback in the oil price should help to improve the trade balance, all else equal, given that the UK is a net importer of oil," he said.

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