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UK trade deficit widens in March from Feb's 3-1/2 yr low

Published 05/13/2010, 04:32 AM
Updated 05/13/2010, 04:36 AM

LONDON, May 13 (Reuters) - Britain's goods trade deficit with the rest of the world widened more than expected in March after imports grew over five times faster than exports, official data showed on Thursday.

The Office for National Statistics said the data's volatility had been heightened by weather-related distortions at the start of the year, which shifted some exports into Feburary, when the trade gap narrowed to a three-and-a-half year low.

The global goods trade gap widened to 7.522 billion pounds in March from February's 6.305 billion pounds, after exports held broadly steady at 21.437 billion pounds but imports rose to 28.959 billion pounds from 27.532 billion.

This 5.2 percent monthly rise in imports was the biggest increase since September 2009.

The figures are unlikely to please Bank of England Governor Mervyn King, who said on Wednesday that Britain's economy needed to refocus on exports and move away from growth based on domestic consumption.

The rise in imports was broad-based and driven by a jump in imports of intermediate goods such as mechanical and electrical engineering components as well as cars, chemicals and oil.

Exports of chemicals -- previously a strong performer -- fell sharply on the month.

Britain's goods trade gap with countries outside the European Union also widened more than expected in March to 4.103 billion pounds from 3.406 billion in February.

The total trade gap -- which includes the harder-to-quantify trade in services -- widened to 3.863 billion pounds from 2.187 billion pounds.

Britain's surplus in services fell to its lowest since July 2009 at 3.839 billion pounds in March, down from 4.118 billion.

Economists had forecast a global goods trade deficit of 6.41 billion pounds and a goods trade gap with non-EU countries of 3.35 billion pounds. (Reporting by Christina Fincher and David Milliken)

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