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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/trade-deficit-widens-to-record-high.jpg"><img class="alignnone size-full" title="The UK's trade deficit hit a record high in December" src="http://londonglossy.com/wp-content/uploads/2011/02/min-trade-deficit-widens-to-record-high.jpg" alt="The UK's trade deficit hit a record high in December"/></a></p>
<p>The gap between goods exported and imported widened to a record high in December, official figures revealed, casting doubt over the impact trade will have on supporting economic recovery in the UK.</p>
<p>The goods trade deficit hit £9.2 billion in December, from £8.5 billion in November, the Office for National Statistics said. The overall trade deficit, which includes services, was £4.8 million, a five-and-a-half year high.</p>
<p>Imports grew 3.5% in value to £33.4 billion, outpacing exports, which grew 1.5% to £24.2 billion, as oil prices continued to boom and light aircraft sales rose, the ONS said. The snow is likely to have impacted trade, but the ONS said the net effect of the weather was still unclear.</p>
<p>The ONS revealed export volumes, excluding oil, fell 1.3% in December, as the Government planned to unveil measures aimed at boosting overseas sales, especially by smaller companies, to help drive the UK&#8217;s economic recovery.</p>
<p>Wednesday&#8217;s figures will concern Chancellor George Osborne as they show UK trade is having little impact on economic growth, while rising import and export prices will do little to ease the Bank of England&#8217;s fears over stubbornly-high inflation.</p>
<p>Last month, the rate of inflation unexpectedly soared to 3.7%, while other figures showed the UK economy unexpectedly contracted by 0.5% in the final three months of 2010.</p>
<p>The Chancellor is banking on private sector industry to offset the impact of his public sector spending cuts.</p>
<p>Vicky Redwood, senior economist at Capital Economics, said: &#8220;The deterioration in the UK&#8217;s trade position in December probably partly reflects the bad weather, but the underlying trend is still pretty dismal. The big picture is still that the external sector is not giving the economy the support it needs to weather the fiscal squeeze.&#8221;</p>
<p>Howard Archer, chief UK and European economist at IHS Global Insight, said the ongoing eurozone debt crisis posed a further threat to the health of UK export trade.</p>
<p>He added: &#8220;What is clear is that net trade is currently not contributing appreciably to UK growth as has long been hoped for given the competitive pound and decent global economic activity.&#8221;</p>
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