Britain's trade deficit widened more than expected in February as the value of exports shrank to the lowest in a year and a half.

The gap was 6.8 billion pounds (US$13.4 billion), up from a revised 6.4 billion pounds in January, the Office for National Statistics said yesterday in London. Economists expected 6.4 billion pounds, the median of 18 estimates, Bloomberg News said.

Exports fell 0.5 percent and imports rose 1.2 percent.

The pound's gains against the US dollar in the past year are crimping demand for British products abroad and helped spur the biggest monthly drop in factory output in a year. The report signals net trade may have failed to boost growth in Europe's second-biggest economy during the first quarter.

"Trade may be a slight drag on growth this year," said Peter Newland, an economist at Lehman Brothers Holdings Inc in London. "This partly reflects the effect of a higher exchange rate."

The value of exports fell to 18.4 billion pounds, the least since August 2005, the statistics office said. Imports rose to 25.2 billion pounds from 24.9 billion pounds the previous month.

Exporters have struggled to boost overseas sales after their goods became more expensive. The pound rose 11 percent against the US dollar in the past year and reached US$1.9914 on January 23, the most since 1992.

Manufacturing growth has suffered as a result. Factory production unexpectedly fell in February, by 0.6 percent, the biggest drop since October 2005.

"For manufacturers, exchange rates are a critical concern," David Kern, chief economist at the British Chambers of Commerce, said yesterday.