The British trade deficit soared to a record high in October as a consumer spending spree sucked in foreign imports and exporters struggled against a weak global economy and strong sterling, official figures showed yesterday.
Britain chalked up a deficit of £3.56 billion sterling (€5.6 billion) in October from a revised shortfall of £2.74 billion the previous month. This is the highest shortfall since records began, Britain's National Statistics Office said.
A breakdown of the figures showed exports of goods fell 4 per cent to £14.9 billion as Britain's main trading partners grew sluggishly, while imports jumped 1.5 per cent to £18.4 billion.
Economists said the figures were worrying and blamed the Government's lax fiscal policy for stoking up an unsustainable consumer boom.
"The figures highlight the fact that consumers are very over-leveraged," said Commerzbank economist Mr Nick Parsons.
"In effect people are taking out equity release loans on their properties to finance purchases of DVD players. That's not really a sustainable position in the long term," he said.
With the annual rate of British house price inflation running at around 25 per cent, there has been a boom in the number of Britons taking out loans, secured on their properties, to pay for consumer goods such as new cars and electronic devices.
Investec economist Mr Philip Shaw said the trade figures "make fairly grim reading."
Mr Shaw said the latest numbers back up other recent evidence of the severe difficulties facing Britain's long-suffering exporters of manufactured products and other goods. - (AFP)
