UK trade gap widens unexpectedly

Figures released by the Office for National Statistics show that the UK trade deficit grew from a revised £7 billion in December to £8 billion in January. After the initial downward revision of the December figure which had been originally quoted at £7.3 billion many people assumed that the UK was back on a growth path and the deficit for January was forecast to come in at around £6.9 billion. However, it seems that the UK economy may still be struggling to pull away from recession at least in the short term.

The main issue regarding the widening trade gap seems to have been a 6.9% reduction in exports in January although this was partially offset by a 1.6% reduction in imports. It is unclear exactly why exports fell so sharply especially when you bear in mind that the UK currency has been under pressure for some time, something which should help exports from the UK. There is now growing concern that the UK is at the beck and call of the Eurozone, an area of the worldwide economy which is struggling at the moment.

Yet again, just as the UK economy seemed to be on the crest of a wave it has come crashing down again and recent concerns about a double dip recession are almost certain to re-emerge.