London: The UK trade deficit unexpectedly surged in April as exports plunged the most in almost six years.
The goods-trade gap widened to £10.1 billion ($15.7 billion) from £8.73 billion in March, the Office for National Statistics said today in London. The median of 19 forecasts in a Bloomberg News survey was for the deficit to narrow to £8.5 billion from an initially reported £8.56 billion. Exports fell 8.6 per cent, the most since July 2006, and imports slipped 2.5 percent.
UK manufacturing shrank the most in three years in May, a report this month showed. Bank of England Governor Mervyn King unveiled measures late yesterday to fight an escalation of Europe's debt crisis, including a program to boost lending. He also said the case for more stimulus to aid Britain's economy is ‘growing.’
‘‘Serious question marks persist as to whether the UK can achieve a sustained improved export performance," Howard Archer, an economist at IHS Global Insight in London, said before the data was released. ‘‘In particular, concerns persist that UK exports will be limited in the near term at least by muted global growth.’’
The deficit for goods and services widened to V4.42 billion in April, the second highest on record and the biggest since August 2005, in the aftermath of Hurricane Katrina. The surplus for services alone narrowed to 5.68 billion pounds from £5.78 billion, the statistics office said.
EU Deficit
Britain’s goods deficit with the European Union widened to a record 4.9 billion pounds in April from £4.56 billion in March. The records began in 1998. The gap with non-EU nations was 5.2 billion pounds.
Exports fell to 23.8 billion in April, the lowest since December 2010, while imports declined to 33.9 billion pounds. The decline in exports was led by chemicals, cars, precious stones and ships. Chemical sales dropped by £780 million as exports to Germany and the US fell.
