Britain's trade deficit soared to 4.5 billion pounds (US$6.8 billion) last November from the previous month's 3.9 billion pounds (US$5.9 billion), due to a sharp export decline, according to statistics published by the country's National Statistics Bureau on Tuesday.
The collapse in exports added to the current stream of dire news on the economy and undermined hopes that net trade may at least provide some limited support, said Howard Archer, chief economist for UK and Europe of IHS Global Insight.
The deficit in traded goods excluding oil jumped to 7.8 billion pounds (US$11.8 billion) in November from the 7.0 billion pounds (US$10.6 billion) in October as exports tumbled 4.9 percent.
Goods exported to non-European Union countries suffered a particularly sharp fall in November, with exports to the U.S. plunging 21.5 percent.
Goods exported to the EU only edged down by 0.2 percent in the month.
Meanwhile, Britain's imports of traded goods excluding oil fell by 1.8 percent in November, marking a fourth successive decline, which was consistent with the contracting domestic demand.
While Britain's exporters are benefiting from the sharp overall weakening in the pound in recent months, however, it is being countered increasingly by deteriorating domestic demand in key overseas markets, Howard said.
Consistent with this, the December manufacturing purchasing managers' survey and CBI (Confederation of British Industry) industrial trends survey both showed extremely weak export orders, among which the purchasing managers' survey showed export orders in December at the lowest level since the survey started in January 1992.
At the same time, imports will be limited by sharply contracting British domestic demand and the reduced competitiveness of foreign companies due to the markedly weaker pound, so net trade could yet make a modest positive contribution to GDP in 2009, Howard said.
However, this will not be enough to prevent Britain's GDP contracting sharply this year, he said.
Meanwhile, import prices edged up by 0.2 percent month-on-month in November as they were limited by a further sharp fall in oil prices. However, import prices, excluding oil, rose by 2.2 percent month-on-month in November as they were pushed up by the weaker pound.
(Xinhua News Agency January 14, 2009)
