UK trade gap expands to £5.75bn

Analysts believe European export growth was "encouraging"

The UK's global trade gap widened more than expected in April, Office for National Statistics (ONS) data shows.

The trade deficit grew to £5.75bn in April from an upwardly revised £5.7bn a month earlier, although analysts had expected the gap to remain unchanged.

A £600m drop in overall exports was one of the main factors behind the fall. But despite the overall drop, exports to Europe rose 2.5% to £2.37bn.

Meanwhile, analysts blamed the strength of sterling for the fall in exports.

A higher pound makes UK exports more expensive in overseas markets, and the pound has been strengthening recently, especially against the US dollar.

'Encouraging'

Despite the widening deficit analysts said signs from Europe proved to be "encouraging"

"The figures show that the UK is beginning to feel the effect of stronger eurozone growth," said Dominic Bryant of BNP Paribas.

"Export growth to the eurozone countries has surged to about 30% year on year from only 12.4% percent at the end of 2005."

But analysts warned that rising demand from UK consumers could continue to drive imports higher, while competition in the export market from other countries would also have an effect.

"A further widening in the goods deficit might be expected going forward to the extent that world trade continues to expand rapidly, particularly with UK export share losing out to the likes of emerging Asia," said George Buckley, chief UK economist at Deutsche Bank.