Britain's goods trade deficit widened in September to its highest since the series began in 1998 due to a record rise in imports, official data showed on Wednesday.
The rise in the deficit was driven by a 1.2 billion pound surge in imports, mainly of oil, chemicals and silver, while exports rose by less than 0.1 billion pounds.
HOWARD ARCHER, IHS GLOBAL INSIGHT:
The September trade data are very disappointing with imports jumping and exports only flat. Furthermore, exports were revised down appreciably for August. This increases the risk that third quarter GDP growth of 0.5 percent quarter-on-quarter could be revised down and heightens concern over fourth quarter growth prospects.
It should be borne in mind though that trade data are notoriously volatile and can be revised substantially so a single month's figures need to be treated with caution.
The jump in UK imports in September looks particularly strange given the apparent softness of domestic demand. Unfortunately though, the muted exports data look less strange given weaker global growth, especially the problems in key euro zone markets.
ROSS WALKER, RBS
The revisions to the current account back data show a smaller deficit on the broader measure, so the monthly numbers are a bit of a surprise but this isn't the first time it has happened.
Intuitively it doesn't feel right and I wouldn't be surprised if these numbers are heavily revised in subsequent months ... I never read much into one month's numbers.
VICKY REDWOOD, CAPITAL ECONOMICS
September's trade figures suggest that the UK is already suffering the adverse effects of the euro-zone crisis.
The sharp widening in the trade in goods deficit from a revised 8.6 billion pound to 9.8 billion took it to its biggest on record. And the overall trade deficit widened from 2.7 billion to 3.9 billion.
Although part of the deterioration was driven by quite a sharp rise in imports, exported goods volumes fell, by 1.6 percent month-on-month (ex. oil and erratics). This was driven by exports to the EU, which fell by almost 3 percent.
What's more, the downturn in the survey measures of export orders point to further falls in exports ahead. With the euro-zone problems no closer to being resolved, we continue to doubt that the UK's external sector will prevent the economy from sliding back into recession.
PHILIP SHAW, INVESTEC:
This is a poor set of figures. The deficit is well above consensus. And the august number has been revised significantly higher as well.
It's very curious that the cause seems to be a significant increase in imports, bearing in mind that UK domestic demand is hardly booming at the moment.
One has to put a question mark on the figures. They are very curious.
However, financial markets do have a bigger fish to fry today than the UK trade data.
PETER DIXON, COMMERZBANK
We've got a big surge in imports, it looks weird.
That's unlikely to be sustainable, that's the key point. It's not going to do the Q3 GDP estimate any good, it rather suggests that we might see some downward revisions there.
But all in all, until I have more information, I'm inclined to treat this as a rogue figure. That surge in imports doesn't look right given what we know about what's happening in the UK, in the domestic economy, so you might see a bit of a pull-back in the October figures.