UK trade gap widens as oil deficit climbs
Thursday, 10 January 2008 11:28Britain's goods trade deficit with the rest of the world widened in November as the deficit in oil climbed to its highest in more than two years.
The figures also showed a worrying climb in import inflation, a trend that is likely to worsen further given the pound's recent fall.
The goods trade gap widened to £7.34 billion sterling in November from an upwardly revised £7.35 billion in October. Economists had forecast a deficit of £7.23 billion.
The trade gap with non-EU countries narrowed a little to £4.44 billion from an upwardly revised £4.48 billion in October.
The monthly deficit in oil rose to £663m, its highest since September 2005. Oil imports notched a record high in November, although the statistics office noted this was partly the result of rising oil prices.
Import prices, excluding oil and erratics, rose 0.5% in November from 0.2% in October.
The acceleration in import price inflation may partly reflect the fall in the pound towards the end of last year. This is likely to concern policymakers as sterling has fallen even further since November, hitting a series of all-time lows against the euro this week.
The pound fell to fresh record lows beyond 75 pence against the euro today and has shed around 9% in trade-weighted terms over the past six months.
