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UK trade deficit widens to 11-month high

Britain's goods trade deficit with the rest of the world unexpectedly widened to its highest in nearly a year in December, after imports from non-EU countries shot up at their fastest rate since March 2005.

The figures from the Office for National Statistics also showed that Britain's trade deficit for 2009 as a whole narrowed for the first year since 1997 after the global recession caused both imports and exports to fall at their fastest rate in over 50 years.

The ONS said that Britain's goods trade gap widened to £7.278 billion sterling from £6.798 billion, its highest level since January 2009. Eonomists had forecast a deficit of £6.63 billion.

The widening in the deficit was driven by a 7.6% month-on-month increase in non-EU imports, which was the biggest since March 2005. Some £300m of the roughly $1 billion increase in imports was oil-related, and another £225m was linked to aircraft.

The non-EU goods deficit widened to £3.553 billion in December from £3.125 billion the month before, compared to analysts' forecast of £3.15 billion.

The latest figures will be a disappointment to those who hoped that sterling's sharp fall over the last 18 months would have provided more of a boost to net exports.

But for 2009 as a whole the UK's goods trade deficit narrowed by £11.5 billion to £81.9 billion, the first time since 1997 that the full-year deficit has fallen.

But this was due to imports falling faster than exports, as the world recession caused global trade to plummet. Total exports fell 9.5% in 2009, the biggest fall since records began in 1947. Total imports fell 10.3% in 2009, the highest fall since 1952 and the second-highest on record.