UK trade gap widens
OFFICIAL data showed Britain’s goods trade deficit with the rest of the world widened to £8.062bn in May from £7.411bn in April after imports jumped 2.4 per cent on the month while exports were broadly flat.
That was a surprise to economists waiting in vain for an export-led recovery after the pound’s 20 per cent drop in trade-weighted terms since mid-2007.
“It’s consistent with this theme of disappointment that trade isn’t making as big a contribution to growth as we had hoped,” said Ross Walker, UK economist at RBS.
Taking trade in services into account, the total deficit swelled to £3.817bn, its highest since July 2008 from 3.502 billion.
The goods trade gap with non-EU countries also widened unexpectedly to £4.487bn, almost £700m higher than analysts had forecast.