Disappointing and worrying but hardly a shock. That's the way to look at the latest set of UK trade figures showing the biggest deficit for a year.
What's happening is pretty simple. Britain's biggest trading partner by far is the euro area, where domestic demand is extremely weak. Consumer spending here, by contrast, is recovering at a reasonably rapid lick, resulting in goods being sucked in from across the Channel.
This trend has been especially marked in the car industry. Europe has over-capacity in its auto industry and is producing far more cars than it can flog to a depressed domestic market. But in the UK it has been a different story. Demand for new cars has been rising, providing a ready market for manufacturers in Germany, France, Spain and Italy.
Why is this disappointing? Well, by rights the big fall in the value of sterling since the start of the financial crisis six years ago handed UK exporters a big competitive advantage. In the past, a 25% depreciation in the value of the pound would have led to an improvement in the trade balance. That hasn't happened this time, in part because of the long-running crisis in the euro area, but in part due to the shrinking size of the UK's manufacturing base.
Why is it worrying? In the latest three months the UK ran a trade deficit in goods of £29bn. That was offset by a surplus in services, which is holding steady at just under £20bn a quarter. But a trade gap a little shy of £10bn a quarter at the start of an economic cycle is too big for comfort.
And, if history is any guide, the trade gap will widen further as consumption expands more rapidly than production. It all seems depressingly familiar.
