British trade deficit widens in April despite weaker sterling
BRITAIN’S trade deficit widened to £7bn in April, up from £6.5bn in March, according to the Office of National Statistics, despite a recent raft of positive data.
Economists had been expecting a trade deficit of £6.4bn.
The gap in goods and services was £3bn compared with a gap of £2.7bn in March, the data showed.
IHS Global Insight’s Howard Archer said the widening deficit was disappointing but added that the rise in imports in April could be another sign domestic demand is beginning to firm.
He added: “Contracting domestic demand in overseas markets is countering the boost to UK exporters coming from the more competitive pound.”
The ONS said the deficit with EU countries was £2.9bn in April, compared with £3.1bn in March, while the deficit with non-EU countries widened to £4.1bn against £3.4bn in March.
Meanwhile, the data showed that import prices excluding oil and erratics fell by 1.3 per cent month-on-month in April, suggesting that the firming in sterling from its lows around the turn of the year is having some dampening impact on prices.
Overall, import prices fell by 1.1 per cent month-on-month in April.