Barclays expresses concern over trade figures

Short term economic recovery has been cast into doubt due to the latest figures on trade, according to a senior executive at Barclays.

Iain MacDonald, head of trade product at the bank, said that the widening trade gap will be a "cause for further concern" as to whether the UK will be able to recover fully in the short run.

The comments come after new figures from the Office for National Statistics revealed that the deficit on trade in January stood at £3.8 billion.

Calculated on the basis of the value of imports against exports, the data revealed that the trade gap increased from a deficit of £2.6 billion in December 2009.

Mr MacDonald said: "Though the mid-to-long-term effects may still be too early to tell, the recent weakening of sterling against the euro could bolster exports in the months to come and provide some respite for companies selling abroad.

"However, caution will still need to be exercised as both importers and exporters aim to strike the right balance in their working capital levels in order to seize upon potential growth opportunities throughout the rest of the year."