Analysts said the figures - which revealed falling export demand and a sharp rise in imports - increased the likelihood of another cut in interest rates before Christmas.
Adam Cole at HSBC Securities said: "These data further increase the pressure for lower base rates with January still the most likely timing, but December looking an increasingly close call."
The poor data knocked sentiment in the stock market, where the FTSE 100 index closed down 43 points at 5755.3. The pound was also hit, falling more than a pfennig against the German mark following the release of the figures.
Sterling later recovered following publication of weak German price data, and finished the day at DM2.83, virtually unchanged from Tuesday's close.
Analysts said a surge in imports was the main reason behind the rise in the goods deficit, which almost doubled between August and September. The value of imported goods rose by 5.2 per cent during the month, taking the total value of goods imported in September to pounds 15.8 billion.
Prices of imported goods fell by 0.7 per cent, the Office for National Statistics (ONS) said.
Imports from both inside and outside the European Union were up, suggesting that the recent strength of the pound is making domestically-produced goods look expensive. ABN Amro said: "The loss of competitiveness is encouraging import penetration."
The 0.9 per cent fall in the prices of goods imported from outside the European Union suggests that crisis-hit economies in Asia are cutting prices in an attempt to stimulate demand, analysts said.
The value of goods exported by the UK fell by 3.2 per cent in September to pounds 13.3 bn. The ONS said that exports to East Asia had stabilised, although they remain some 30 per cent below normal. Exports to Russia are now languishing at pounds 30m a month, 70 per cent below their 1997 average. "The fall in exports to Russia has primarily been over the last three months," the ONS said.
Brian Wilson, Trade Minister, said: "Global economic problems, particularly in Asia, continue to have a serious negative impact on the overall figures. We cannot expect to be immune from these events."
Nick Stamenkovic, chief economist at Bank Austria Creditanstalt Futures, said: "The figures were very disappointing indeed. They show the previous strength of the pound is still taking its toll."
Trade in services is still holding up, according to ONS figures, despite the difficult business environment.
September's surplus on traded services was pounds 954m, marginally down from August's surplus of pounds 1.05bn. This takes the balance of trade - which combines the services surplus with the goods deficit - to a deficit of pounds 1.5bn, again the highest on record. Economists were gloomy about the near-term outlook for trade.
Preliminary figures on trade in goods with non-EU countries in October suggest a marginal improvement to the trade position, although economists said the overall trend was still overwhelmingly negative.
The October non-EU deficit on goods was estimated at pounds 1.3 bn, down from a record pounds 1.9 bn in September.
Outlook, page 21