Britain’s total trade deficit widened to £2.9 billion in February after narrowing to £1.3 billion in January.
This poor performance deals a significant blow to hopes that net trade helped UK GDP growth in the first quarter. Not only was February’s deficit appreciably larger than expected but also January’s shortfall was revised up significantly.
Exports suffered a relapse, primarily due to a 6.6 per cent fall in exports of goods to non-EU countries.
Exports to Eurozone countries edged up 0.4 per cent on the month in February.
The current strength of the pound against the euro will be of concern to UK exporters. Sterling traded at a seven-year high against the euro in March.
Latest survey evidence on foreign orders, says Global Insight economist Howard Archer, is mixed.
On the positive side, the manufacturing purchasing managers reported a marked pick-up in foreign orders in March to be at a seven-month high.
In contrast, the export orders balance of the CBI’s Industrial Trends Survey relapsed to a 26-month low of -26% in March.