Britain's trade deficit soared to a record £33.6 billion last year, as the slowdown in world trade and tough competition hurt exports.
Data from the Office for National Statistics showed the deficit for trade in goods in 2001 widened from the previous year's £30 billion.
It included a record deficit with non-EU countries, and a widened deficit with EU countries.
Monthly figures also showed a worsening picture, with the balance on trade in goods widening in December.
The deficit comes on the back of the slowdown in world trade, which has hit exports.
Engineering Employers' Federation chief economist Stephen Radley, said: "Manufacturers live or die by their success in export markets.
"Though there is little that the Government can do about the state of the world economy or the weakness of the euro it can help manufacturers to raise competitiveness. It must not miss this opportunity in the forthcoming Budget."
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