Britain’s Trade Deficit Widens

LONDON (AP) -- Britain's trade deficit widened a little more than forecast in June, official figures showed Tuesday, suggesting that weakness in the pound is not benefiting exporters quite as much as expected.

The Office for National Statistics said that the goods trade gap rose to 6.45 billion pounds ($10.60 billion) from 6.17 billion pounds in May. Economists had forecast a deficit of 6.2 billion pounds.

"Exporters are being helped by the persistent weakness of sterling, but this is being offset by feeble global demand," said Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club consultancy.

Imports rose 2.2 percent, still the biggest increase since July 2008, while exports increased 1.4 percent.

Exports to nations outside the European Union fell 2.6 percent, while sales to EU countries, which account for more than half of all exports, increased by 4.8 percent, the statistics office said.

The Bank of England said last week there is evidence of stabilization in Britain's main export markets, and most economists still expect the trade gap to narrow in coming months as a weaker pound helps demand for British goods overseas.

Mehta said that poor prospects in the euro-zone pose a threat to a sustainable recovery in Britain.

"Nevertheless, the continuing consumer retrenchment should help to suppress imports and give a boost to the trade numbers in the coming months," Mehta said.

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