Sliding oil prices sends UK deficit to record high

9th February 2016, Comments 0 comments

Britain's trade deficit reached a record high last year as the value of North Sea oil exports tumbled.

The deficit on trade in goods expanded to £125 billion ($180 billion, 160 billion euros), a rise of 1.5 percent compared with 2014, the Office for National Statistics (ONS) said in a statement.

Total exports fell 2.8 percent, as sliding oil prices hit income earned from sales abroad of North Sea crude. Imports dropped 1.5 percent year-on-year.

Meanwhile exports of goods to the rest of the European Union fell by £11.6 billion, owing to a "fall in oil exports of £9.8 billion", the ONS said.

Howard Archer, chief UK economist at research group IHS Global Insight, said exporters had been helped since the start of the year by a weaker British currency.

"Indeed, the pound hit a seven-year low against the US dollar in January (... and) sterling has hit a 13-month low against the euro this week."

Britain's economy is slowing amid a darkening global outlook, causing the Bank of England to last week cut its growth forecasts and leave interest rates at a record-low level.

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© 2016 AFP

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