UK's trade deficit with EU widens to a record

The Pak Banker - - MARKETS/SPORTS -

Bri­tain's goods-trade gap with the Euro­pean Union widened to a record, with ex­ports in the last three months fall­ing the low­est in more than six years.

Data from the Of­fice of Na­tional Sta­tis­tics showed a deficit of 8.1 bil­lion pounds in Jan­uary and 23 bil­lion pounds over the past three months. Both fig­ures are the high­est since the data be­gan in 1998. Ex­ports to the 28-na­tion bloc in the quar­ter through Jan­uary de­clined to 32.7 bil­lion pounds, the least since 2009.

With the UK hold­ing a ref­er­en­dum on EU mem­ber­ship in three months, ev­ery as­pect of the economies' re­la­tion­ship is be­ing fought over by cam­paign­ers. Those who want to leave -- a so-called "Brexit" -say the U.K. should fo­cus on new mar­kets, while those in fa­vor of re­main­ing ar­gue Bri­tain can ben­e­fit from the EU's clout in global trade. The widen­ing in the trade gap with the EU in Jan­uary was largely due to an in­crease in im­ports. The bloc re­mains Bri­tain's big­gest trad­ing part­ner, ac­count­ing for al­most 50 per­cent of ex­ports.

The U.K.'s to­tal goods trade deficit was at 10.3 bil­lion pounds in Jan­uary, match­ing econ­o­mists' me­dian es­ti­mate. There was a sur­plus on ser­vices, leav­ing the over­all goods and ser­vices gap at 3.5 bil­lion pounds.

In a sep­a­rate re­port, the ONS said con­struc­tion out­put fell 0.2 per­cent in Jan­uary from De­cem­ber and was down 0.8 per­cent year on year. New hous­ing fell in Jan­uary, led by the big­gest de­cline in pub­lic home­build­ing in three years. Con­struc­tion in the fourth quar­ter was re­vised to a 0.3 per­cent gain rather than the pre­vi­ously es­ti­mated 0.4 per­cent drop. As it only ac­counts for 6 per­cent of the econ­omy, the re­vi­sion has no im­pact on GDP to one dec­i­mal place.

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