UK posts £8bn trade deficit

Date: 9th March 2010

The UK trade deficit increased to £8 billion in January, new figures have shown.

Industry experts have been surprised by the result, which they said is £1 billion worse than expected.

Duncan Higgins, a senior analyst at foreign exchange service Caxton FX, said: "These figures have come as quite a shock to the markets.

"With sterling as weak as it is, it had been hoped that the increased competitiveness of UK exports would have supported a rebalancing of the deficit. It isn't a marginal widening either, at £8 billion, this is the deepest trade imbalance that the UK has recorded since January 2009 and will simply snowball the negative sentiment already focused on the economy."

Mr Higgins claimed that the figure is evidence that the UK is "far too reliant" on a healthy level of imports.

The expert said the greater costs of importing goods are offsetting any positives created by the weak state of sterling.