Britain’s trade deficit widens against expectations

Britain’s goods trade deficit unexpectedly widened in April as exports to countries outside the EU fell sharply while imports dipped less, according to data released today by the Office for National Statistics (ONS).

The ONS said the goods trade deficit grew to £10.1bn – the second-largest gap since records began in January 1998. Economists had forecast a gap of £8.5bn.

Exports to non-EU countries fell 10.3 per cent in April, driven by lower sales of chemicals and cars. Exports of goods to the EU dropped 6.8 per cent on the month, outweighing a 3 per cent fall in imports.

Separate non-seasonally adjusted ONS data showed that construction output fell 8.5 per cent year-on-year in April.

Yesterday, in a bid to boost economic growth, Bank of England governor Mervyn King said that Britain would launch a scheme to provide cheap long-term funding to banks to encourage them to lend to businesses and consumers.