exporters must look beyond Europe to fast-growing emerging markets to help the UK’s economic recovery, experts urged yesterday as figures revealed a wider than expected trade deficit.
The increase was driven by a rise in imports and a drop in exports, which was caused by a fall in orders to non-European Union countries, such as India, as EU exports continued to increase.
The trade in goods deficit increased to £8.6bn in November, compared with £7.9bn in October. City analysts had expected a deficit of £8.3bn.
The figures, which also showed the gap in trade of both goods and services widening to £2.6bn from £1.9bn, will concern Chancellor George Osborne, who has pinned his hopes on an export-driven recovery in the private sector.
But Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club, said: “Some deterioration was always likely after October’s surge, but the UK’s trade performance held up reasonably well in November. The trade deficit remains lower than it was for much of 2011.”
He added: “The short-term export outlook is challenging given events in the eurozone – our biggest export market.
“But the UK is pinning much of its hopes on exports to power the recovery, so it’s imperative that exporters look to new, faster-growing markets if they are to play their part.”
Improved demand from the US and China is likely to be countered by weak demand in Europe.