Britain is now net oil importer

BRITAIN was today revealed as a net oil importer for the first time in 13 years. In fresh evidence that the bumper years for the North Sea are fading fast, Britain sucked in £61m more oil than it exported in July - the first deficit since August 1991.

The shortfall was blamed for pushing the overall trade in goods deficit to a bigger-than-expected £5.2bn from £5bn the month before.

Economists said this indicated exporters were not benefiting from a pick-up in the global economy.

'The continued widening in the trade deficit will do nothing to help sterling,' said George Buckley at Deutsche Bank.

North Sea oil has been declining for some time as fields mature and new finds are harder to come by. But with crude prices hovering near record highs, the latest development is worrying.

The Bank of England's monetary policy committee left interest rates on hold at 4.75% after its latest meeting.

Mounting evidence the housing boom is over, consumers are tightening their belts and manufacturing is struggling has raised the question of whether the next move will be up or down.

Philip Shaw at Investec said: 'We are pencilling in one more hike to 5%, but only early next year, and we recognise that, if the housing market downturn gathers momentum, it is not beyond the realms of possibility that rates have already peaked.'