UK Trade Deficit Widened in March

The U.K. trade deficit widened in March as imports jumped the most in six months, led by demand for goods from cars to engineering equipment., Bloomberg 5/13/2010 9:41:32 AM

The goods-trade gap was 7.5 billion pounds ($11.1 billion), compared with 6.3 billion pounds in February, the Office for National Statistics said.

Imports jumped 5.2 percent to an 18-month high, outpacing a 1 percent increase in exports.

Imports rose to 29 billion pounds in March, led by increases in cars and intermediate goods such as engineering and scientific equipment. Exports increased to 21.4 billion pounds. Both are at the highest level since September 2008.

The total trade gap widened to 3.7 billion pounds as services exports fell to the lowest since August 2007.

The U.K.’s trade deficit with the European Union widened to 3.4 billion pounds in March, a three-month high, from 2.9 billion pounds in February. Bank of England Governor Mervyn King yesterday cautioned that the U.K. economy remains vulnerable to the fiscal crisis in the euro area, its biggest trading partner.

The Bank of England is counting on a weak pound to boost exports and support economic growth it helped manufacturing jump the most since 2002 last month. The sovereign debt crisis in Europe has darkened the outlook for U.K. exporters at a time when domestic demand may come under pressure from measures to tackle the public finances.

UK Trade Deficit Widened in March