British trade deficit expands to eight-month high

Britain's trade-in-goods deficit expanded to an eight-month high at 7.2 billion pounds in September, as car imports surged thanks to the government's new-for-old vehicle scheme, data showed on Tuesday.

The figure, equivalent to 8.0 billion euros or 12 billion dollars, compared with a revised deficit of 6.1 billion pounds in August, the Office for National Statistics (ONS) said in a statement.

August's trade-in-goods deficit had originally been put at 6.2 billion pounds. Market expectations had been for a September deficit of 6.1 billion pounds, according to economists polled by Dow Jones Newswires.

"Looking behind the headline figure, the UK's deficit on trade in goods widened ... as total imports rose by 7.5 percent compared with growth in exported goods of 3.9 percent," said economist Benjamin Williamson at the Centre for Economics and Business Research consultancy.

He added: "The UK imported an additional 0.4 billion pounds worth of cars in September from August. This represents an increase of 29.2 percent over the month as UK consumers took advantage of the car scrappage scheme."

Britain's 400-million-pound (446-million-euro, 662-million-dollar) scheme mirrors similar projects in France, Germany and the United States.

The initiative -- giving buyers a 2,000-pound discount when they trade in a car over 10 years old -- was launched in April. The government and car manufacturers each contribute half of the cost.

In October, sales of new cars in Britain soared by 31.6 percent as a result of the scheme, industry body the Society of Motor Manufacturers and Traders had revealed last week.

1. Office for National Statistics