LONDON Britain's hopes of shifting its economy away from a reliance on domestic consumers suffered another setback on Friday as data underscored how exporters are struggling to make headway.
The goods trade deficit widened much more than expected in September to hit its biggest shortfall in almost a year.
Exports of goods over the third quarter fell by the most in more than four years, in volume terms, the Office for National Statistics said.
Britain's economy has staged a surprising recovery this year, but the improvement has come mainly from domestic spending, frustrating the government's plan to get the economy more focused on selling goods and services abroad.
By contrast, Germany's trade surplus rose to a record high in September as exports climbed across the board, data showed on Friday.
Strong domestic demand was likely to boost British imports in coming months, further delaying any rebalancing even as the country's euro zone trading partners recover from recession, Howard Archer, an economist with IHS Global Insight, said.
"There are grounds for hopes that exports will pick up over the coming months, although it seems improbable that net trade will become a significant overall contributor to UK growth," Archer said.
As well as the weak demand in recent years from the recession-hit euro zone - which accounts for about half its total exports - Britain has fallen way behind Germany when it comes to selling goods to some of the world's developing economies, such as China.
Sterling fell versus the dollar and pulled away from a 10-month high against the euro on Friday after the weak trade data.
EXPORTS TAKE A TUMBLE
The ONS said Britain's deficit in goods unexpectedly grew to 9.816 billion pounds ($15.75 billion) from 9.557 billion pounds in August. Economists in a Reuters poll had forecast a gap of 9.2 billion pounds.
Including Britain's surplus in trade in services, the overall trade deficit widened slightly to 3.268 billion pounds.
Monthly figures tend to be volatile, but over the three months to September, goods export volumes fell sharply by 4.6 percent - the biggest fall on that measure since the three months to March 2009 - and imports rose 1.3 percent.
The latest data means trade would have a slowing effect on economic growth in the third quarter, ONS officials said, adding they could not yet quantify the drag. In the previous three-month period, trade's contribution to GDP was neutral.
Britain's economy grew by 0.8 percent in the third quarter, compared with the previous three months, according to a preliminary estimate given by the ONS last month.
Revised GDP figures are due to be released on November 27.
Separate data released by the ONS on Friday showed growth in Britain's construction sector slowed to 1.7 percent in the July-September period, less than the 2.5 percent estimated within the preliminary GDP reading.
However, the revised number was not low enough to drag down overall GDP growth in the third quarter, ONS officials said.
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