The U.K's visible trade gap widened more than expected in November, as exports declined due to reduced shipments to non-EU countries, data from the Office for National Statistics revealed Wednesday.
The deficit on trade in goods amounted to a seasonally adjusted GBP 8.6 billion in November. Economists expected the deficit to rise to GBP 8.4 billion from October's GBP 7.9 billion.
The figures have been particularly volatile in the past couple of months, but the big picture is that the overall trade deficit has now returned to the average level seen in the rest of 2011, Vicky Redwood, an economist at Capital Economics said.
However, "net trade still looks unlikely to stop the wider economy from falling back into recession this year," the economist added.
Exports of goods fell 0.4 percent month-over-month, while imports dropped 0.2 percent. Excluding oil and erratic items, the seasonally adjusted volume of exports was 1.7 percent lower, and the volume of imports was 1.1 per cent higher in November, compared with October.
According to the statistical office, the decrease in exports was driven by lower exports of silver to non-EU countries, including India.
"Exports to EU countries actually managed to hold onto November's sharp increase. Clearly we doubt that this will last as euro-zone demand weakens," Redwood said.
The surplus on trade in services came in at GBP 6.1 billion. The deficit on trade in goods and services was GBP 2.6 billion in November compared with the deficit of GBP 1.9 billion in October. Economists were looking for a deficit of GBP 2.4 billion.
Trade with non-EU countries resulted in a deficit of GBP 5 billion, higher than a shortfall of GBP 4.6 billion in October. This was almost in line with expectations. Trade with EU countries also saw a higher deficit of GBP 3.6 billion compared to October's GBP 3.3 billion.
"Looking through the recent erratic monthly moves in the trade data, there is little evidence overall of marked improvement, which is disappointing for hopes that improved exports can boost overall growth and help the UK economy to become more balanced," said Howard Archer, chief economist at IHS Global Insight.
In its latest Quarterly Economic Survey released Tuesday, the British Chambers of Commerce said it expects the U.K. economy to stagnate overall until mid-2012, though the situation is better than those seen in the worst phase of the last downturn.
The Bank of England is expected to retain its key interest rate at a record low during the monetary policy meeting to be held on Thursday. It is also likely to keep the asset purchase target unchanged at GBP 275 billion.
The U.K's visible trade gap widened more than expected in November, as exports declined due to reduced shipments to non-EU countries, data from the Office for National Statistics revealed Wednesday. (Market News Provided by RTTNews) Post Comment Email(required) Password (required) Comment (required)(Characters left: 3000) History 01/11/2012 Portuguese Inflation Eases In December 01/11/2012 UK Trade Deficit Rises More Than Expected 01/11/2012 German Economic Growth Slows In 2011 01/11/2012 Italy Budget Deficit Drops To 2.7% Of GDP In Q3 01/11/2012 Romania Average Gross Wages Rise In November Show All News Show Latest News TOP 100 INVESTING SITESTOP 100 STOCK INVESTING SITESTOP 100 FINANCIAL SITESTOP 100 FOREX SITES Subscribe Live News Subscribe Analytics Trading terms
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