UK trade deficit hits record high
Britain’s goods trade deficit widened in September to its highest since the series began in 1998 after a record jump in imports countered a tepid rise in exports, data showed on Wednesday.
Economists said the numbers indicated the crisis in the euro zone had dampened Britain’s exports, and cautioned against interpreting the surge in imports as a sign of recovering domestic demand.
The Office for National Statistics said the goods trade deficit widened to some £9.8bn in September from an upwardly revised £8.6bn in August. Economists had forecast a much smaller shortfall of £8bn.
The rise in the deficit was driven by a £1.2bn surge in imports to £34.27bn, a series high and which reflected higher demand for oil, chemicals and silver.
“The jump in UK imports in September looks particularly strange given the apparent softness of domestic demand,” IHS Global Insight economist Howard Archer said.
“Unfortunately though, the muted exports data look less strange given weaker global growth, especially the problems in key euro zone markets,” he added.
Imports of consumer goods other than cars rose by 218 million pounds on the month. Within that category, imports of works of art soared by 131 percent on the month to 400 million pounds. Imports of precious stones jumped by 227 million pounds on the month, although statisticians cautioned that this was an erratic item.
Exports, meanwhile, rose by less than 0.1 billion pounds, reflecting weaker demand from abroad for chemicals, intermediate goods and consumer goods.
Analysts noted that monthly trade figures tend to be volatile and subject to big revisions, and said they did not alter the view that the economy was in the doldrums.
“It looks weird,” said Peter Dixon, economist at Commerzbank. “I’m inclined to treat this as a rogue figure. That surge in imports doesn’t look right given what we know about what’s happening in the UK, in the domestic economy, so you m