Britain's trade deficit widens to 2.6bn pounds in January

British trade deficit widened to 2.6 billion pounds (4.16 billion U.S. dollars) in January 2014, from a deficit of 700 million pounds in December 2013, the Office for National Statistics (ONS) announced Friday. Britain saw a deficit of 9.8 billion on goods, partly offset by an estimated surplus of 7.2 billion on services, data showed. Export of goods to both the European Union (EU) and non-EU countries fell by 3.7 percent and 4.3 percent respectively between Dec. 2013 and Jan. 2014, while imports of goods from EU countries remained unchanged and imports of goods from non-EU nations increased by 7.5 percent, said ONS. "The falls in exports reflect trade in commodities, which can be volatile, such as aircraft and chemicals -- similarly the increase in imports also reflects commodities prone to volatility such as oil, and again aircraft," said ONS. In the three month to Jan. 2014, however, Britain's exports of goods decreased by 1.1 percent to 74.2 billion pounds, and imports of goods also shrunk by 3.0 percent in the same period to 101.2 billion, data also showed. "The latest trade figures show that the economic recovery is still struggling to broaden out to include exports, and this looks likely to remain the case as long as the euro-zone's economic recovery remains sluggish," said Samuel Tombs, British economist at Capital Economist, a London-based economic research company. "This could be a sign that the stronger pound is now starting to have an adverse effect on the UK's economic recovery," added Tombs in his analysis piece. Andrew Goodwin, senior economic adviser to the EY ITEM Club, also noted that the ongoing strength of sterling won't help the recovery of Britain's export activity. "Domestic demand will eventually rise at a healthy pace, and we expect growth in imports to pick up, cutting any support to the economy from net trade," said Goodwin.