UK trade deficit widens sharply in April

Cargo containers being moved at a port Overall UK exports declined in April

The UK's trade deficit widened sharply in April to its highest level in almost seven years, largely thanks to a slump in car and chemical exports.

Official figures showed the seasonally adjusted deficit was £4.4bn, compared with £3bn in March.

The worsening deficit was driven by an 8.6% fall in overall exports, including a 6.8% drop in exports to other European Union nations.

Analysts said it highlighted the continuing weakness in the UK economy.

Howard Archer, chief European and UK economist at IHS Global Insight, said: "With the trade deficit widening in April and construction output again disappointing, the chances of the economy avoiding further contraction in the second quarter are dwindling."

In April, the total goods trade deficit was £10.1bn, according to official figures, compared with £8.7bn in March.

At the same time, the services surplus was £5.7bn in April, slightly lower than March's £5.8bn.

Peter Dixon, from Commerzbank, agreed that the latest trade figures added to a weak picture of the UK's economic health: "I think if you look at where we are now... it does imply we're on a deteriorating trend.

"It suggests that yet again the eurozone crisis is beginning to have a bigger drag on exports and as a consequence a bigger drag on Q2 GDP [second quarter gross domestic product] numbers. Along with the extra public holiday, it doesn't bode well."

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