The gap between the UK’s imports and exports widened in May, new figures show, in a surprise move that alarmed economists.
The trade deficit rose to £4.1bn from £3.1bn in April, as a service sector surplus failed to offset a collapse in exports of manufactured goods.
The Office of National Statistics data showed the goods trade deficit hit £8.5bn, far higher than forecasts for a £7.4bn monthly deficit, as chemicals imports rose more than exports of goods such as silver.
Total export volume increased by 1.9 per cent, while imports rose by six per cent.
Investec economist Philip Shaw said the balance of trade was “unequivocally disappointing” as it showed the ‘core’ goods deficit widening.
“Looking at the data in volume terms, we judge it very unlikely that net exports made a positive contribution to GDP over Q2,” he said in a note.
British Chambers of Commerce (BCC) chief economist David Kern said the data showed exports rising at an insufficient pace to rebalance the UK economy.
“Unless net exports become the main engine of Britain’s economic recovery, it will be difficult to sustain growth. The government’s deficit cuts are continuing to put pressure on domestic demand. As well as stronger exports, we also need to see UK firms replacing imports in the domestic market by buying more of our own goods and service,” he said.