11 July 2006, 13:08  UK's trade in goods deficit worsens sharply in May, second highest ever

The UK's trade position with the rest of the world deteriorated sharply in May with the monthly shortfall the second highest ever, official figures showed. The office for National Statistics said the UK's trade in goods with the rest of the world widened to 6.8 bln stg in May from 5.6 in April. The April figure was revised down from 5.8 bln stg previously. Analysts polled by AFX News had predicted a much narrower deficit of 5.7 bln stg for May. The widest ever deficit was recorded in February this year, when the shortfall stood at 7.2 bln stg. Between April and May, imports rose by 3.9 pct to 27.9 bln stg while exports eased by 0.6 pct to 21.2 bln stg. Geographically, the UK's trade with non-EU countries widened to a deficit of 3.7 bln stg from an unrevised 3.4 bln stg in April. The gap is the widest since January this year. Meanwhile, trade with the EU's 25 countries widened to 3.0 bln stg from 2.2 bln stg. This gap is the widest since February this year Trade in oil contributed to the wider deficit in May. It recorded a shortfall of 320 mln stg compared with a surplus of 201 mln stg the previous month as imports of oil rose due to lower production and stock building. The trade in goods deficit, excluding oil and erratics, widened to 6.1 bln stg in May from 5.7 bln stg the previous month. Looking at the figures from a three-month perspective, however, some improvement was seen. The trade in goods deficit narrowed in the 3-months to May, to 18.0 bln stg from 20.3 bln stg in the 3-months to February. The UK's trade in services, meanwhile, improved slightly, recording a surplus of 2.3 bln stg from 2.1 bln stg in April. As a result, total trade in goods and services stood at a deficit of 4.4 bln stg, wider than the 3.4 bln stg in April.

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