LONDON (Reuters) - Britain’s goods trade deficit narrowed in November as exports rose more than imports, official data showed on Wednesday.
The Office for National Statistics said the goods trade deficit shrank to 9.164 billion pounds from 9.487 billion pounds in October. Economists had forecast a gap of 9.05 billion pounds.
The goods trade deficit with non-EU countries widened to 4.519 billion pounds in November from 4.502 billion pounds in October, confounding forecasts for a gap of 4.2 billion pounds.
Including Britain’s traditional surplus in trade in services, the overall trade deficit shrank to 3.466 billion pounds.
The monthly figures tend to be volatile. Still, the latest data reveals a sizeable deficit and makes it more likely that net trade was a drag on quarterly economic growth in the final three months of 2012, having contributed to the strongest GDP performance in five years in the third quarter.
According to November data, goods imports from the European Union rose to the highest value since May 2006, driven by chemicals and cars.
Taking the first 11 months of 2012 together, the goods trade deficit has been running at an average of 8.9 billion pounds a month, compared to 8.4 billion pounds in 2011, the ONS said. This dampens the government’s hopes that Britain will rebalance away from an over-reliance on imports.
December surveys of purchasing managers had already pointed to a 0.2 percent dip in British economic output in late 2012, although less timely official data on services, manufacturing and construction has been more ambiguous.
Immediate prospects for British trade remain dim as a debt crisis is sapping demand in the country’s main trading partner, the euzo zone.
Despite a weak outlook for British economic growth, the Bank of England is unlikely to extend its stimulus programme on Thursday, as worries about stubborn inflation take precedence.
Reporting by Olesya Dmitracova and Peter Griffiths