LONDON, Dec 19: Britain’s closely-watched goods trade deficit with the rest of the world was roughly steady in October as export growth kept pace with rising imports, official data showed on Wednesday.

National Statistics said the deficit of 2.25 billion pounds in October followed a 2.31 billion shortfall the previous month despite economists’ fears that brisk consumer demand for foreign goods could lead to a spiralling deficit.

The deficit was offset by a 911 million pound surplus in services, a traditionally strong sector of the British economy, up from 348 million in September, which was the lowest monthly balance since May 1993.

However, the recent trend in the trade data — based on recently published figures — suggests the deficit is set to widen further.

The outturn was bang in line with economists’ expectations and had no significant impact on domestic financial markets, which tend to take the trade figures in their stride.

A breakdown of the figures showed, however, Britain’s goods trade deficit with the European Union widened to 625 million pounds in October, the biggest gap since May 2000.

National Statistics said Britain’s goods trade balance with countries outside the EU widened to 2.0 billion pounds in November from 1.7 billion in October. The change was chiefly driven by a fall in exports from Britain’s hard-pressed manfuacturing sector.

Manufacturing, which accounts for around 19 percent of total economic output, fell into recession earlier in the year — its third major downturn in a decade.

In the latest three months imports from the United States have tumbled 1.07 billion pounds while exports to the United States declined 343 million pounds, reflecting tough economic conditions across the globe.

The fall in imports from the United States over the past three months was the steepest since records began in 1988.

There have been concerns that strong consumer spending in Britain could send the trade deficit spiralling higher, but so far most of the spending effect on trade has been limited mainly to car imports.

Retail sales in Britain surged 1.3 percent in November, rising at their fastest monthly pace in nearly a year. Sales stood 7.1 percent higher than a year earlier, the strongest annual rise since May 1988.

Britain has been importing more cars in recent months to meet this demand. Over the past three months the country has seen a seven percent rise in car imports and just a four percent rise in exports. The demand for cars has helped push imports from Germany up 149 million pounds in the three months to October.—Reuters