 The weaker pound has not helped exporters |
Britain's trade deficit has recorded a surprise increase, due to a sharp slowdown in exports to countries outside the European Union. The Office for National Statistics (ONS) said the total value of imports exceeded the value of exports in June by �4.5bn ($7.2bn), up from �4.1bn in May.
The figure wrong-footed City economists, who had been expecting the trade gap to narrow to �3.8bn.
The unexpected increase partly reflected a steep drop in the value of non-EU exports, which fell by 13.1% compared with the previous month.
The total trade deficit with non-EU countries climbed to �2.7bn, up from �2.3bn in May.
The UK's export performance has been hit in recent months by global economic weakness, which has reduced demand for British goods abroad despite a depreciation in the value of the pound since the beginning of the year.
"This is quite disappointing given that the fall in the strength of sterling over the last year should have helped exporters compete in the international market," said Philip Shaw, economist at Investec bank.
Measurement error?
However, the ONS said the figures may have been distorted by computer problems, and may be revised higher at a later date.
"The non-EU trade numbers have been very volatile recently and there do seem to be some problems with the data, which may be revised, so we should not get too excited about these trade numbers," said Alan Castle, UK economist at Lehman Brothers.
Analysts expect the UK trade gap to narrow in the months ahead as the eurozone economies - which account for about 50% of Britain's exports - begin to pick up.
Persistently high trade deficits can put pressure on the value of the pound, leading ultimately to an increase in interest rates aimed at choking off an inflationary surge in the price of imported goods.
Separately, the ONS said the prices paid for goods manufactured in Britain rose 0.2% in July from the previous month, double the 0.1% expected by analysts.
Analysts said the increase came as manufacturers passed on recent rises in the price of oil and other internationally traded commodities.