British trade deficit widens in April despite weaker sterling

<!--StartFragment--> BRITAIN&rsquo;S trade deficit widened to &pound;7bn in April, up from &pound;6.5bn in March, according to the Office of National Statistics, despite a recent raft of positive data.<br /><br />Economists had been expecting a trade deficit of &pound;6.4bn.<br /><br />The gap in goods and services was &pound;3bn compared with a gap of &pound;2.7bn in March, the data showed.<br /><br />IHS Global Insight&rsquo;s Howard Archer said the widening deficit was disappointing but added that the rise in imports in April could be another sign domestic demand is beginning to firm.<br /><br />He added: &ldquo;Contracting domestic demand in overseas markets is countering the boost to UK exporters coming from the more competitive pound.&rdquo;<br /><br />The ONS said the deficit with EU countries was &pound;2.9bn in April, compared with &pound;3.1bn in March, while the deficit with non-EU countries widened to &pound;4.1bn against &pound;3.4bn in March.<br /><br />Meanwhile, the data showed that import prices excluding oil and erratics fell by 1.3 per cent month-on-month in April, suggesting that the firming in sterling from its lows around the turn of the year is having some dampening impact on prices.<br /><br />Overall, import prices fell by 1.1 per cent month-on-month in April. <!--EndFragment-->