UK trade deficit points to export drag in 4Q
LONDON: Britain's trade deficit widened in the fourth quarter as exports fell, underscoring the economy's reliance on domestic spending. The value of imported goods and services outstripped exports by 10.3 billion pounds compared with 8.6 billion pounds in the third quarter, the Office for National Statistics said in London on Tuesday. In December alone, the deficit narrowed to 2.7 billion pounds, with the shortfall in goods falling to 9.9 billion pounds. Both were narrower than economists forecast. The figures put a spotlight on Britain's unbalanced economy, which is being driven by consumer spending and the dominant services sector as global turmoil holds back exports and manufacturing. Bank of England officials indicated last week they are in no hurry to raise the benchmark interest rate from a record-low 0.5 percent.
Total exports fell 0.8 percent in the fourth quarter. In December alone, goods exports declined 0.3 percent and imports dropped 4.8 percent. The value of oil imports fell 11 percent to 1.9 billion pounds, the lowest level since February 2009, reflecting falling prices. Net trade knocked 1 percentage point off growth in the third quarter and looks set to have been a drag again in the fourth.