The October deficit weighed in at £17.03 billion, well above the market consensus and up from September's unrevised £14.29 billion and a 5-month high. However, the deterioration masked growth in both sides of the balance sheet with exports rising a monthly 2.0 percent and imports 7.5 percent.

The shortfall with the EU expanded from £9.84 billion to £12.20 billion, a 4-month peak, as exports slumped 5.8 percent and imports grew 6.0 percent. With the rest of the world, the red ink climbed only slightly from £4.45 billion to £4.83 billion to leave a broadly flat trend.

The monthly data continue to be very volatile but the October report warns that the fourth quarter could bring an end to the recent modest shrinkage in the overall deficit. In any event, the shortfall remains uncomfortably large and a potential threat to the pound as and when the BoE finally decides to cut interest rates. To this end, today's surprisingly weak updates reduce the UK RPI to minus 25 and the RPI-P to minus 33. Both readings show economic activity falling quite well short of market expectations and so bolster the likelihood of no change in Bank Rate tomorrow.

The global goods deficit is put at £14.5 billion, up slightly from September's £14.29 billion.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Data are supplied by over 30 sources including several administrative sources, HM Revenue and Customs (HMRC) being the largest.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in the UK. Exports show the demand for UK goods in countries overseas. The pound sterling can be particularly sensitive to changes in the trade deficit run by the United Kingdom, since the trade shortfalls create greater net demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.

The UK's trade balance is particularly susceptible to swings in the oil account and so within the overall goods balance, financial markets will normally focus on the balance excluding oil and other erratic items.