The British trade deficit widened more than expected in February as exports to the US and Saudi Arabia fell sharply, official data showed this morning.
The Office for National Statistics said the goods trade deficit with the world widened to £3.7 billion sterling in February compared with £3.2 billion in January and more than the £3.3 billion analysts had expected.
Overall exports were down nearly five percent on the month but imports were also 1.5 per cent lower. The ONS said the rise in the deficit was driven by the gap with countries outside the European Union, particularly the US and Saudi Arabia.
The drop in exports to the US was probably driven by fewer works of art changing hands and may have accounted for up to half of the monthly decline in exports, the ONS said.
This widened the non-EU gap to £2.4 billion from £2 billion in the prior month, also more than the £2.1 billion analysts had forecast.
The deficit with EU countries remained broadly unchanged at £1.25 billion, the ONS said.
Financial markets, which are focusing on minute-to-minute developments in the war in Iraq and Chancellor Gordon Brown's budget statement later in the day, mostly shrugged off the figures. Sterling, however, edged lower against the dollar right after the data were released.