UK Data: Oct Trade Deficit Widens More Than Expected

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-Oct Global Goods Trade Deficit Stg9.539bn vs Stg8.439bn Sep
-Oct Total Trade Deficit Stg3.644bn vs Stg2.493bn Sep

LONDON (MNI) – The UK’s trade deficit widened in October as exports
to non-European countries fell sharply and imports from the EU rose,
figures from National Statistics revealed Thursday.

The widening was larger than analysts had expected and it wasn’t
down to the anticipated widening in the oil gap. Excluding oil and
erratic items the situation deteriorated significantly. Having narrowed
in Q3, with net trade adding to GDP, these latest data points to a
widening in Q4 and a possible subtraction from growth.

The global goods shortfall widened to Stg9.539 billion in October
from Stg8.439 billion, above the median forecast for a deficit of Stg8.6
billion. The value of imports rose 2.5% on the month while exports fell
1%.

There was a slight narrowing in the oil deficit to Stg1.065 billion
from Stg1.381 billion. Oil imports surged back in August, with the oil
deficit spiking to stg1.728 billion and this has narrowed in the past
two months.

The surprise really came from the core deficit, which excludes oil
and erratic items, which rose to Stg8.361 billion from Stg6.686 billion,
the highest since June 2012, as imports rose 3.8% against a 3.2% drop in
exports.

The widening in the overall goods deficit was due to both a
deterioration in the non-EU and EU shortfalls.

The EU deficit rose to Stg5.007 billion from Stg4.496 billion, back
very close to the record high of Stg5.06 billion posted in August.

For the latest three months, August to October, the EU deficit was
also the highest on record. This doesn’t bode well for the UK’s hoped
for export led recovery.

The non-EU shortfall widened to Stg4.532 billion from Stg3.943
billion as exports fell 3% while imports rose 1.3%.

The total trade gap, including services, rose to Stg3.644 billion
from Stg2.493 billion.

-London bureau: 0044 20 7862 7491; email: puglow@marketnews.com

[TOPICS: M$B$$$,MT$$$$,MABDS$]

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