BRITAIN'S goods trade gap with European Union countries rose to its highest level for 17 months, in October, figures have revealed.

A dip in exports saw the deficit at £625m, which was 26 per cent above the figure recorded by the Office for National Statistics in September.

Only a sharp rise in exports to countries outside the EU held the overall goods trade gap steady at £2.3bn in the month, the ONS said.

The figures were in line with City expectations but analysts said the gap was set to widen.

Philip Shaw, chief economist at Investec, said manufacturers were finding it harder to sell abroad, but consumers sucked in imports.

"A strong consumer sector and a weakening world economy spells a rising deficit," he said.

"The EU deficit is not surprising. EU countries account for half our exports and when the Continental economy sneezes, we catch a cold."

Provisional figures showed the goods trade gap with non-EU countries widened last month to £2bn from £1.7bn in October