Britain's trade deficit widened more than expected in June, as imports outpaced exports, data released on Tuesday (9 August) by the Office for National Statistics (ONS) showed.
According to the ONS, the UK's trade in goods and services widened by £0.9bn to £5.1bn in June, compared with the downwardly revised £4.2bn figure recorded in May and analysts' expectations for a £2.5bn reading.
The ONS said the widening in deficit came as exports increased by £1bn and imports climbed £1.9bn to reach a record high of £48.9bn.
Meanwhile, the deficit on trade goods in the month leading up to the Brexit referendum hit its highest level since March 2015, after growing to £12.5bn compared with the £11.5bn recorded in the previous month - a figure which was revised upward from the initial £9.9bn estimate.
The ONS added the total trade deficit for goods and services widened by £0.4bn to £12.5bn between the first and second quarter of this year.
The rise in imports could spell bad news for the UK economy, given sterling has fallen sharply following the European Union referendum. The pound, which last week hit a three-week low after the Bank of England cut interest rates to a record low, was 0.20% lower against the euro and slid 0.35% against the dollar immediately after the release, exchanging hands at €1.1727 and $1.2993.
"The trade deficit likely will remain bloated in the near-term, as sterling's depreciation will continue to make imports dearer," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"Previous sterling depreciations typically have taken two years to boost net trade, as it takes time for contracts to be renegotiated and exporters to invest in new capacity.
Tombs added that hopes that exports will surge and offset the Brexit hit to domestic demand seem misplaced.
"We fear that the trade boost could take even longer than usual to materialise this time, because exporters will be very reluctant to invest until the UK's future trade arrangements are known," he said.