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Last Updated: Thursday, 9 February 2006, 11:15 GMT
UK goods trade deficit increases
The annual goods deficit hit a record
The UK's goods trade deficit with the rest of the world widened unexpectedly in December, according to the Office for National Statistics (ONS).

The ONS said the gap hit 6.06bn in December, up from 6.01bn in November as chemical imports rose and exports of capital goods fell.

However, the gap in both goods and services narrowed to 4.4bn, after a deficit of 4.5bn in November.

For the whole of 2005, the UK's goods deficit hit a record 65.5bn.

The deficit on goods and services also hit a record of 47.6bn, compared with a 39bn deficit in 2004.

'Food for thought'

"This should serve as food for thought for the Bank of England," according to Jonathan Said, economist at Capital Business & Economic Research (CBER).

"However we do not expect it to influence its interest rate decision in the short-term.

"If economic growth loses steam in the second half of the year, the trade deficit will back the argument for lower rates."

In December, there were increases in imports from non-EU countries of chemicals, and of fuels other than oil, offset partially by lower imports of oil and aircraft.

The deficit on trade in goods with the EU in December was 2.9bn, down from 3.0bn in November.

Exports of oil to EU countries rose, while imports of consumer goods other than cars also rose, the ONS said.

See Gordon Brown commenting on the trade deficit in 1988

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