According to the latest report on UK trade from the Office for National Statistics the seasonally adjusted deficit in goods and services rose unexpectedly from £3.9 billion in November 2010 to £4.8 billion in December.

The total deficit in goods and services over 2010 increased by £16.5 billion from 2009's £29.7 billion to £46.2 billion. The worst figure for five years.

The ONS report also says that, excluding oil and erratic items, the seasonally adjusted volumes of imports rose 1.4% and exports dropped 1.3% from November to December.

It is also worth looking behind those headline figures and looking at 'goods' and 'services' separately.

With goods alone there was an increase in the seasonally adjusted deficit in December of £9.2 billion, which is £0.7 billion higher than November's £8.5 billion. When looking at the 2010 deficit in goods it rose to £97.2 billion from £82.4 billion in 2009. This is the highest since the records began in 1980. Total exports did rise by a healthy 16.9% with exports in all areas of the economy increasing, but imports also rose by 17.2%.

Looking at services there was an estimated £4.4 billion surplus, a drop of £0.1 billion on November. Over 2009 the surplus was £52.7 billion, which dropped to £51 billion in 2010.

Some economists are saying that the adverse weather may have affected the figures, but it would be hard to determine why it would affect exports more than imports. It may also be a reflection of higher commodity prices and the demand for material that our economic growth will depend on in the future.

The five key export markets in geographical terms identified by the report in 2010 were (in order) the USA, Germany, the Netherlands, France and the Irish Republic. We imported the most from (in order) Germany, China, the USA, the Netherlands and France.

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