The Office for National Statistics (ONS) has today revealed the UK’s trade gap widened unexpectedly in January to a 17-month high.
The news disappointed markets and sent the already weak pound falling. Sterling fell 0.4% to €1.10 at mid morning and lost 0.75% against the dollar to fall below the $1.50 mark.
Sterling has lost around 24% of its value since early 2007 against many world currencies.
Meanwhile, according to the ONS, exports fell 6.9% - the sharpest decline in more than three years, while imports fell 1.6%.
As a result, the trade gap widened to almost £8 billion - exceeding the £7 billion forecast by economists.
According to the ONS, there was no specific explanation for the figures but many attributed it to the particularly bad snowfall experienced in January, which may have disrupted trade flows.
Alan Clarke, an analysts at BNP Paribas, said: “It’s a pretty disappointing number. Trade is one area where people have been expecting an improvement but it doesn’t seem to be happening. In the big picture this is bad news for quarter one GDP.”
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