Sterling tumbled again to near record lows against the dollar today and a three-week low against the euro as official figures showed Britain's trade deficit had unexpectedly widened in December to its highest level in nearly a year.

Britain’s goods trade gap with the rest of the world widened from £6.8 billion in November to £7.28 billion in December, its highest level since January 2009 as imports — particularly of cars and aircraft — rose faster than exports. Economists had forecast the deficit would narrow to £6.63 billion.

That, combined with an unexpected drop in UK January retail sales figures released last night, reinforced existing worries about the health of Britain's economy which has been driving a rush to the safe haven of the dollar.

Sterling was down 0.1 per cent at $1.5565 falling close to yesterday's low of $1.5535, which was its lowest since May last year.

Even the weak euro, which has been hit by a crisis of confidence over some of the eurozone's debt laden smaller countries such as Greece and Portugal, strengthened against the pound on speculation that the EU was drawing up a rescue plan for Greece. It hit a three-week high of 88.14p after the trade data, up 0.7 per cent on the day.

Jean-Claude Trichet, the president of the European Central Bank, has let it be known that he is returning early from a trip to Australia to attend a European Council summit.

Vicky Redwood, an economist at Capital Economics, said: “December’s UK trade figures suggest that the external sector is still feeling little benefit from either the lower pound or tentative global recovery.”

Howard Archer, the chief UK and European economist for IHS Global Insight, said: "The December trade figures suggest that net trade was negative in the fourth quarter of 2009 and dilutes hopes that GDP growth could be revised up from the preliminary estimate of just 0.1 per cent. This does little for nerves over the strength and sustainability of the recovery."

However, he said that rising imports, though largely due to the car scrappage scheme, at least showed rising domestic demand and some recent economic figures for January showed exports improving.

Explore Economics

• Pre-Budget Report 2009

• Budget 2010

• World Economic Forum in Davos

• The Times MPC

Times Recommends

• Tories’ green bank to revolutionise power policy
• UK car industry receives £2.6bn injection
• Pru chief turns down seat on board of bank