THE UK's deficit on trade in goods with the rest of the world widened significantly to a much worse-than-forecast £9.79 billion in January, as exports tumbled to a 19-month low, official figures have revealed.

The seasonally-adjusted data, published yesterday by the Office for National Statistics, represent a setback for Chancellor George Osborne ahead of his Budget next week.

Mr Osborne, in his March 2011 Budget, set out his vision of "a Britain carried aloft by the march of the makers" but this has failed to materialise.

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The City had forecast a UK goods trade deficit of £8.6bn for January. The December goods trade deficit was £7.66bn.

The UK's goods exports dropped to £24.2bn in January from £25.3bn in December. The January goods exports figure was the lowest since June 2012.

Samuel Tombs, UK economist at consultancy Capital Economics, said: "The latest trade figures show that the economic recovery is still struggling to broaden out to include exports. This looks likely to remain the case so long as the eurozone's economic recovery remains sluggish."

The UK's surplus on trade in services rose from £6.99bn in December to £7.23bn in January. Taking goods and services together, the UK's trade deficit widened to £2.565bn in January, from £668m in December.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "With the trade deficit starting off the first quarter on a disappointing note... it increases the odds that net trade will be a drag on growth in the first quarter."