Economists said figures from the Office for National Statistics (ONS) suggested the economy failed to achieve any growth in the first three months of the year, when the trade deficit on goods and services rose to £3.4bn in February from £2.5bn – far worse than forecasts of an improvement to £2bn.
"These data, along with other figures, suggest that the economy was roughly flat in the first quarter," said Michael Saunders, UK economist at Citi. Alan Clarke of Scotiabank added: "It is looking increasingly likely that the economy hasn't grown for six months."
The widening in the deficit was driven by a fall in exports, while imports remained flat – delivering a set back to the Government's plans for an export-led recovery. HSBC said there was "little sign of rebalancing" in the numbers.
Any lingering optimism was further damaged by the World Trade Organisation (WTO), which warned international trade would slump this year because the global economy had "lost momentum".
The WTO said it expected a slowdown in trade growth to 3.7pc, from 5pc in 2011, due to economic shocks like the eurozone crisis. Its new forecasts were a sharp downgrade from the 5.8pc growth it was predicting as recently as September.
Concerns about Britain's economic prospects were sparked particularly by the scale of weakness in exports to non-European markets, which are widely considered the UK's best hope for growth.
Exports of goods to non-EU countries fell by 8.8pc, led by a sharp decline in the sale of cars to the US, Russia and China.Despite the eurozone debt crisis, the trade deficit in goods with countries in the EU narrowed.
Europe accounts for more than half of UK exports but, Vicky Redwood at Capital Economics said, given the eurozone's problems "export growth to Europe is likely to weaken soon too".
Only last week, economic indicators seemed to rule out the prospect of a contraction in the first three months of the year.
The National Institute for Economic & Social Research said it expected 0.1pc growth in the quarter, recovering some of the ground lost in the 0.3pc contraction in the final three months of 2011.
"While survey data have been better than expected, the hard data that feed into GDP have been disappointing," Mr Clarke said.
The UK's goods deficit increased to £8.8bn in February from £7.9bn in January. The services surplus was unchanged at £5.4bn.
The trade data also pointed to a rise in inflation, as the prices of imported goods rose 0.7pc between January and February, driven by rising oil prices.
telegraph.co.uk
"These data, along with other figures, suggest that the economy was roughly flat in the first quarter," said Michael Saunders, UK economist at Citi. Alan Clarke of Scotiabank added: "It is looking increasingly likely that the economy hasn't grown for six months."
The widening in the deficit was driven by a fall in exports, while imports remained flat – delivering a set back to the Government's plans for an export-led recovery. HSBC said there was "little sign of rebalancing" in the numbers.
Any lingering optimism was further damaged by the World Trade Organisation (WTO), which warned international trade would slump this year because the global economy had "lost momentum".
The WTO said it expected a slowdown in trade growth to 3.7pc, from 5pc in 2011, due to economic shocks like the eurozone crisis. Its new forecasts were a sharp downgrade from the 5.8pc growth it was predicting as recently as September.
Concerns about Britain's economic prospects were sparked particularly by the scale of weakness in exports to non-European markets, which are widely considered the UK's best hope for growth.
Exports of goods to non-EU countries fell by 8.8pc, led by a sharp decline in the sale of cars to the US, Russia and China.Despite the eurozone debt crisis, the trade deficit in goods with countries in the EU narrowed.
Europe accounts for more than half of UK exports but, Vicky Redwood at Capital Economics said, given the eurozone's problems "export growth to Europe is likely to weaken soon too".
Only last week, economic indicators seemed to rule out the prospect of a contraction in the first three months of the year.
The National Institute for Economic & Social Research said it expected 0.1pc growth in the quarter, recovering some of the ground lost in the 0.3pc contraction in the final three months of 2011.
"While survey data have been better than expected, the hard data that feed into GDP have been disappointing," Mr Clarke said.
The UK's goods deficit increased to £8.8bn in February from £7.9bn in January. The services surplus was unchanged at £5.4bn.
The trade data also pointed to a rise in inflation, as the prices of imported goods rose 0.7pc between January and February, driven by rising oil prices.
telegraph.co.uk
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