UK trade gap hits new record as imports soar

Britain's goods trade deficit with the rest of the world unexpectedly widened to a record high in July after imports of chemicals and oil surged and exports fell, data off showed.

The total trade deficit, which includes services, also widened sharply to its highest in almost five years, denting hopes that exports will be able to drive growth as the government and consumers rein in spending.

The Office for National Statistics said the goods trade gap widened to £8.667bn in July from £7.5bn in June, wrongfooting analysts who had expected a broadly unchanged reading.

July's deficit was the biggest since the series started in January 1998 and has not been exceeded in earlier but non-comparable records that date back to 1697.

Imports rose 3.1 percent on the month, driven by an increase in imports of organic chemicals, pharmaceuticals and oil, the latter due to maintenance work on North Sea oil rigs.

Exports, by contrast, fell 0.9 per cent, led again by chemicals and oil.

Economists will be keen to see whether the deterioration continues or if July's figures prove a short-term hit from oil rig maintenance work.

Including services data, the total trade gap widened to 4.916 billion pounds from £3.9bnn, its widest since August 2005.

The non-EU goods trade gap also widened more than expected to £4.8bn £4.3bn, its widest since January.