UK trade deficit soars as exports slump

Britain’s trade-in-goods deficit widened far more than expected in June as exports slumped, official data showed Thursday, dealing another blow to the country’s chances of a quick exit from recession. The deficit shot up to £10.1 billion ($15.8 billion, 12.8 billion euros) in June from £8.4 billion in May, the Office for National Statistics (ONS) said. Market expectations had been for a trade deficit of £9.0 billion in June, according to analysts polled by Dow Jones Newswires. “There was a deficit of £10.1 billion on goods, which was only partly offset by a surplus of £5.8 billion on services,” the ONS said. Britain’s overall trade deficit ballooned to £4.3 billion in June — the largest amount since comparable records began in 1997, the ONS said. Goods exports in June fell 8.4 per cent from May to £23.5 billion as trade dried up between Britain and the rest of the world — not just the eurozone with which the country does most of its business. “The weakness in exports was a result of sharp drops to both EU and non-EU countries,” said Barclays analyst Blerina Uruci, who noted that trade data tended to be very volatile and subject to major revisions. “Nevertheless, with the euro area in recession and the rest of the global economy slowing, the outlook for exports seems rather dismal and the prospects for any material rebalancing of the economy are not encouraging,” she added. The data comes a day after the Bank of England slashed its forecast for British growth this year to close to zero percent, saying the greatest threat to recovery came from the eurozone debt crisis. From:Gulftoday