Trade figures 'show UK suffering'
Wednesday 09 November 2011
The gap between goods imported and exported in the UK hit a record high in September, official figures revealed today, as deepening troubles in the eurozone took their toll.
The deficit on trade in goods widened to £9.8 billion in September, compared to an upwardly revised £8.6 billion gap the previous month, the Office for National Statistics (ONS) said.
The record gap came as the volume of exports, excluding oil, fell 1.6%, which was driven by exports to the EU - down 3% - while import volumes were up 1.6%, driven by chemicals and consumer goods.
Vicky Redwood, chief UK economist at Capital Economics, said: "September's trade figures suggest that the UK is already suffering the adverse effects of the eurozone crisis."
The figures, which also showed the gap in trade of goods and services widening to an 11-month high of £3.9 billion, will be a blow to Chancellor George Osborne, who has pinned his hopes on an export-driven recovery in the private sector.
The figures are not likely to improve as the crisis in the eurozone deepens, with Greece closer to defaulting on its debts and Italy now on the brink of requiring a bailout from the EU and IMF.
But trade and investment minister Lord Green said the UK was working on boosting trade with emerging markets in the wake of increased uncertainty on the continent.
Lord Green said trade was "at the heart" of the Government's plan for growth and actions were being taken to support its vision.
The decline in the volume of exports was driven by consumer goods, other than cars, which fell 5%, the ONS said.
The value of exports rose by less than £100 million, or 0.2%, in September, while import values rose 3.8% to £34.3 billion.
Benjamin Williamson, senior economist at the Centre for Economics and Business Research, said: "The problems within the eurozone, by far the UK's largest trade partner, have worsened of late with Greece and then Italy looking increasingly likely to default on their debts.
"This would be bad news for the UK in the short-term and could push us back into recession next year."
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