Export slump drives trade deficit to record level

By David Milliken and Matt Falloon

LONDON (Reuters) - Britain's goods trade gap with the rest of the world grew to record levels in November as the global economic downturn pummelled demand for UK exports beyond the EU, despite a big fall in the value of the pound.

A slump in exports to the United States made up half of the drop in demand for British goods abroad, as the trade deficit with non-European Union countries rose to its highest level since the data series began in 1998.

The Office for National Statistics said on Tuesday that Britain's goods trade gap with the rest of the world widened to 8.330 billion pounds in November from 7.631 billion in October, the biggest since records began in 1697.

Economists had forecast a deficit of 7.5 billion pounds.

The goods trade gap with non-European Union countries jumped to 5.304 billion pounds from 4.437 billion in October.

Sterling fell against the dollar after the figures added to evidence of a worsening economic outlook.

"One thing is for sure, the UK can't rely on the global economy or the fall in the pound to drag it out of its deepest recession since the early 1980s," said Paul Dales, an economist at Capital Economics.

GLOBAL DOWNTURN