The UK's trade deficit hit a new monthly record of £4.6 billion today after exports to countries outside the European Union slumped 19 per cent in January.

The gap in trade on goods and services compared with £3.1 billion in December and is far higher than City expectations of around £3.3 billion.

Further bad news for the manufacturing sector came from production figures showing output rose by 0.2 per cent between December and January. That was weaker than expected as firms faced up to the impact of the weak US dollar on exports.

David Page, the Investec economist, said: "The help that the UK manufacturing sector looked like it was getting from the recovery in global demand seems to have disappeared overnight."

Today's trade figures show total UK exports of goods fell 9 per cent to £14.6 billion in January with the figure for imports up 1 per cent to £20.2 billion.

With the dollar at its weakest level against the pound for 11 years, the balance in goods with non-EU countries widened to £3.4 billion from £1.4 billion in December.

The balance with EU countries narrowed by £500 million to £2.1 billion.

The trade deficit on UK goods worldwide stood at a record £5.6 billion, but a surplus in the trade in services of £1 billion helped reduce the overall deficit figure for January to £4.6 billion.

The breakdown of today's figures shows exports to the United States fell by £400 million in the three months to January. Exports rose to both Germany and Italy by £100 million, the Office of National Statistics (ONS) added.

Vince Cable, the Liberal Democrat Treasury spokesman, said the trade deficit highlighted the "deep imbalances" in the UK economy.

He added: "Overvaluation against the dollar means that industry may have serious difficulty competing with overseas rivals. The Chancellor is simply betting on a global recovery to get Britain out of this fix."

Explore Entrepreneur

• SME

• Start-ups