The trade deficit for the first three months of the year rose to a record pounds 7.1bn, the Office for National Statistics (ONS) said.
The global trade gap for March narrowed slightly to pounds 2.148bn from pounds 2.297bn in February. But exports to the EU slumped in the face of the strength of sterling against a weak euro. The EU deficit widened to pounds 1.019bn from pounds 769m - the worst performance for nine years. The City had expected the global deficit to narrow to pounds 1.8bn and economists said there was a growing split between trade with Europe and with the rest of the world.
The trade gap with non-EU countries narrowed to pounds 1.055bn in April from pounds 1.129bn and well below gloomy forecasts of pounds 1.5bn. Rob Hayward, from Bank of America, said: "It does seem to suggest there is a divergence of trends in the world economy. Clearly, the weakness in the European economy is having a negative effect."
Economists said the data could open the door for another 0.25 per cent cut in interest rates next month.Reuse content