LONDON, March 9 (UPI) -- Britain's trade deficit hit a record high in January as the pound's strength against the dollar crippled exports, the Financial Times reported Tuesday.
The markets were expecting the goods deficit to remain broadly unchanged from December's $7.7 billion shortfall, so the increased spread between imports and exports to a record $10 billion saw the pound drop more than half a cent to $1.8386 in London early in the day.
The overall deficit in January was provisionally estimated at a record $8.5 billion, compared with $5.7 billion in December.
The widening was due to a 7 percent slump, or $2.75 billion drop, in export volume outside the EU plunging by 17.5 percent in January compared December.
Economists said this might be an early indication of the negative impact from the strength of the pound, which has risen by about 3 percent on a trade-weighted basis over the past month.
Richard Iley at BNP Paribas described the government announcement as "terrible numbers."
"These numbers are shockingly bad and it's no surprise that sterling has come under immediate pressure in their aftermath," he said.