Britain's goods trade deficit with the rest of the world unexpectedly widened to its highest in nearly a year in December, after imports from non-EU countries shot up at their fastest rate since March 2005.
Figures from the Office for National Statistics on Tuesday also showed Britain's trade deficit for 2009 as a whole narrowed for the first year since 1997 after global recession caused both imports and exports to fall at their fastest rate in over 50 years.
The ONS said Britain's December goods trade gap widened to 7.278 billion pounds ($11.34 billion) from 6.798 billion in November, its highest level since January 2009. Economists had forecast a deficit of 6.63 billion pounds.
Sterling fell to a three-week low versus the euro <EURGBP=>, and also slipped versus the dollar <GBP=>.
The widening in the deficit was driven by a 7.6 percent month-on-month increase in non-EU imports, which was the biggest since March 2005. Some 300 million pounds of the roughly 1 billion pound increase in imports was oil-related, and another 225 million was linked to aircraft.
The non-EU goods deficit widened to 3.553 billion pounds in December from 3.125 billion pounds the month before, compared to analysts' forecast of 3.15 billion pounds.
The latest figures will be a disappointment to those who hoped that sterling's sharp fall over the last 18 months would have provided more of a boost to net exports.
Nonetheless, for 2009 as a whole the UK's goods trade deficit narrowed by 11.5 billion pounds to 81.9 billion pounds, the first time since 1997 that the full-year deficit has fallen.
"The trade numbers have come in worse than the market was expecting but this may be a case of monthly volatility," said David Page, economist at Investec. "The general trend over the past year has been for a narrowing in the deficit and we think this will continue."
2009's narrowing was due to imports falling faster than exports, as the world recession caused global trade to plummet.
Total exports fell 9.5 percent in 2009, the biggest fall since records began in 1947. Total imports fell 10.3 percent in 2009, the highest fall since 1952 and the second-highest on record.
