Worries about a sharp slowdown in the third quarter were heightened today following a "desperately disappointing" set of UK trade figures for July.

The Office for National Statistics revealed an increase in Britain's deficit on trade in goods to £8.7bn from £7.5bn in June. Economists had expected a similar result to the month before.

A surge in imports to their highest level in two years was blamed. They were up 3.1% to £30.9bn, driven by oil and chemicals. Exports fell 0.9% to £22.3bn, undoing some of the good from increases in May and June.

The seasonally adjusted deficit on trade in goods and services swelled to £4.9bn in July from £3.9bn the month before, revised up from £3.3bn.

"The UK trade data for July were desperately disappointing, thereby adding to the mounting concerns over third quarter growth prospects," said Howard Archer, chief UK economist at IHS Global Insight.

"With latest data raising concerns that domestic demand is losing significant momentum, the UK can little do with net trade also deteriorating anew after being in balance in the second quarter."

Britain's economy grew more than initially thought in the three months to June, up 1.2% and better than initial estimates of a 1.1% improvement.

The upward revision followed a reassessment of construction output. Production there is now expected to have grown by 8.5%, up from the previous estimate of 6.6%.

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