Britain's global trade deficit rises

Britain's global trade deficit in goods unexpectedly shot up in June to its highest level since last November as exports to countries…

Britain's global trade deficit in goods unexpectedly shot up in June to its highest level since last November as exports to countries outside Europe fell sharply, new figures show.

But statisticians said the figures were being distorted by ongoing computer problems and could be revised significantly in the months ahead, probably lowering the overall trade gap.

The Office for National Statistics (ONS) said the global goods deficit widened to £4.5 billion sterling (€6.37 million) from £4.1 billion in May and versus analysts' forecasts of £3.8 billion.

But it added that it still saw the trend in the deficit as being flat and economists said that sterling's relative weakness and signs of global recovery should mean that the deficit could be reduced next year.

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"Looking to 2004, especially as we see the euro zone begin to recover, we would expect to see the deficit narrow significantly," said Mr David Page, Investec economist.

The ONS said the trade figures were possibly distorted due to Customs and Excise technical difficulties in allocating non-EU exports to the correct month.

The ONS also released figures on producer prices in July, which suggested that sterling's weakness may finally be pushing up inflation at the factory gate, but not by much.