Britain's trade deficit with the rest of the world has deteriorated sharply to record a billion pound shortfall, dashing expectations that an improving world economy would boost exports.
The global goods trade deficit jumped 16 per cent from 2.6 billion pounds in February to record its worst deficit this year in March. It had been expected by City analysts to narrow to £2.5 billion.
"The surge in export optimism we have seen in business surveys has not fed through to the actual trade numbers yet although it should do at some point. But for now the trend of falling exports is, if anything, accelerating," said Daniel Kaye, economist at consultants Capital Economics.
Exports of goods fell 1.3 per cent to £15 billion, and imports rose 1.2 per cent to £18 billion.
The Office for National Statistics said the main reason for the bigger deficit in March was a widening of the trade deficit with the 14 other European Union member countries, caused by both falling exports and rising imports.
The deficit with the EU jumped to 835 million pounds from 488 million in February. Exports to EU countries fell 2.6 per cent to £8.6 billion while imports rose 1.3 per cent to £9.5 billion.
Financial markets showed little reaction to the data, however, as the deficit has been between two and three billion pounds a month for some years. The pound hovered at $1.46 and 62.4 pence to the euro. Gilts were steady and the FTSE 100 remained 33 points lower on the day at 5,162.