UK trade deficit surprises market

It was higher than the predicted £3.8bn and the Office for National Statistics expects things to get even worse.

Economists blamed the European Union for the growing gap - the deficit with the 25 member bloc grew to £3.1bn in February, up from £2.8bn in January.

The goods trade gap was higher than expected, hitting £6.5bn in February.

This was higher than that forecast of £5.7 bn.

The ONS said Britain's most notable imports were in chemicals, consumer goods, capital goods, aircraft and fuel other than oil.

Erratic figures

Simon Wallace from the Centre for Economics and Business Research said he thought it unlikely that the trade balance would influence the Bank of England's Monetary Policy Committee when it makes its decision on interest rates, currently at 4.5%.

But Mr Wallace warned that, in the longer term, the trade balance could become an issue for the committee.

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

Recent months have seen erratic trade figures that have often been revised, due in part to late data.

In February Britain became a net exporter of oil again, but January's deficit in oil was revised up by £300m to £430m.

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