By Philip Aldrick, Economics Editor
10:52AM BST 15 Jun 2012
Figures from the Office for National Statistics (ONS) showed that the UK spent £4.4bn more on imports than it received for exports in April. The deficit, a rise of £1.5bn from March, was far worse than expected, the largest since August 2005, and the second biggest since records began in 1992.
The Government is relying on trade to deliver half of the meagre 0.8pc growth expected this year, but economists said weak exports had now put the plan in jeopardy.
Overall, exports of goods and services fell by £2.1bn to £39.4bn – the lowest level since December 2010. Exports of cars and chemicals were particularly poor, helping to push the goods deficit up by £1.4bn in the month to £10.1bn – the second largest on record.
Martin Beck at Capital Economics said: “These figures further dash any hopes that the external sector might pull the UK out of recession. Indeed, net trade looks like it could be a drag on growth in the second quarter.”
Separate construction data released by the ONS appeared to confirm fears that the recession continued for another three months in the quarter to June. Output in the construction industry fell 13.2pc in April.
Richard Barwell at Royal Bank of Scotland said: “Game over. If the data for May and June follow the same pattern as in 2011 ... this would drag 0.3 percentage points off growth.”
The trade data was “very unsettling”, the Ernst & Young ITEM Club said. Although a drop in exports to the troubled eurozone was expected, the larger fall was to “non-EU” countries.
“The fall in exports to non-EU countries is particularly concerning... Evidence of a slowdown in the emerging markets suggests that this may well be the start of a worrying trend,” E&Y chief economist Mark Gregory said.
The deficit on trade in goods with non-EU countries widened by £1bn to £5.2bn in April, as exports fell by £1.4bn to £11.8bn. By comparison, the deficit on trade in goods with EU countries increased by just £300m to £4.9bn as exports fell by £900m to £12bn.
The British Chambers of Commerce said the data “proves that our exporters are facing major challenges [and] the Government should do more to help them”.
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