The United Kingdom’s trade deficit grew in November, beating expectations as exports fell and imports rose.
The increase in imports was driven largely by a record increase in imports of oil and chemicals.
The British Office for National Statistics said that the country’s goods trade deficit widened to 8.644 billion pounds in November from 7.868 billion pounds in October, above forecasts for a deficit of 8.3 billion pounds.
Meanwhile, the goods trade gap with non-EU countries widened to 5.021 billion pounds in November from 4.556 billion pounds in October, broadly in line with forecasts.
The data highlights concerns that Britain’s economy is struggling to grow and may even fall into recession.
A survey this week showed British manufacturers’ export sales and orders expanded at their slowest pace since late 2009, when Britain was emerging from recession.
With regards to the data having an effect on the Bank of England policy, this should not be the case. The trade balance report will probably do little to change expectations that the Bank of England will need to inject more stimulus to boost growth after resuming its quantitative easing programme last October with a 75 billion pound cash injection.
The BOE is unlikely to expand the programme this month, but is expected to add a further 50 billion pounds in February as the euro crisis threatens Britain’s growth prospects.
The pound fell immediately after the news at 09:30 GMT.
GBPUSD dipped to 1.5459 within 15 minutes from 1.5485. GBPJPY slid from 119.06 to 118.89, while EURGBP rose to 0.8266 from 0.8253.