Car imports drive UK trade deficit wider in Sept

A surge in car imports in September pushed Britain's goods trade deficit to its widest since January, surprising analysts who had expected the weakness in the pound to boost exports and narrow the shortfall.

The Office for National Statistics said on Tuesday that Britain's goods trade gap widened to 7.194 billion pounds in September from 6.073 billion pounds in August, confounding expectations for a slight narrowing in the deficit.

While exports rose 3.9 percent on the month, imports rose almost twice as fast, by 7.5 percent.

"It's very disappointing that the trade balance has deteriorated," said Alan Clarke, economist at BNP Paribas.

"This is one area we were hoping would help to drive us out of recession."

Policymakers have been hoping that sterling's 25 percent depreciation over the last two years would promote an export-led recovery, as Britain's dependence on consumer spending has made it vulnerable.

Car imports shot up 30 percent in September, the biggest rise in 13 years, according to the ONS, which said demand had been encouraged by the government's car scrappage scheme.

And the oil deficit widened to 500 million pounds, its biggest since July 2008. The ONS said higher oil imports were due to domestic production being suppressed by summer maintenance work on North Sea oil refineries extending into September.

The goods trade gap with non-EU countries also widened unexpectedly to 3.783 billion pounds from 3.060 billion pounds in August. Analysts had forecast a deficit of 3.0 billion pounds.

And Britain's total trade deficit, which includes both goods and services, increased to 3.469 billion pounds — the biggest since August 2008.