A SHUTDOWN of the Forties pipeline in the North Sea in December hit both UK trade and industrial output at the end of last year, according to official figures.

Data from the Office for National Statistics (ONS) yesterday showed the UK’s trade deficit widening by £3.8 billion to £10.8bn in the three months to December 2017.

Goods trading was impacted by a 3.8 per cent – or £2.1 billion – increase in imports from non-EU countries, as well as a drop in exports to the EU, which have been worsening since hitting a peak last summer.

However, the ONS said a drop in the UK’s oil exports – as well as large increases in the price of fuel imports – had the largest impact on the trade in goods deficit, which widened by £3.3bn, while the surplus in services narrowed over the period by £500 million.

Petrochemical giant INEOS – owned by billionaire Jim Ratcliffe – completed its acquisition of the Forties pipeline in October, but its temporary closure hit the oil industry over most of December.

A routine inspection found a hairline crack in the pipe south of Aberdeen, prompting emergency repairs that stopped the flow of oil and gas from platforms feeding into the system for almost a fortnight, pushing oil prices above $67 a barrel – then its highest since 2015.

The pipeline was shut again last Wednesday, after a problem was found with a valve connecting it to the gas plant at Kinneil, it but was reopened the following day.

However, the pipeline problem also hit production output, contributing to a 4.7 per cent drop in mining and quarrying, which partially offset a 1.3 per cent rise in manufacturing in the three months to December, resulting in a mere 0.5 per cent increase in the ONS Index of Production.

ONS senior statistician Ole Black said: “Manufacturing continued to grow strongly in the last three months of the year, with metal goods and pharmaceuticals driving growth.

“However, overall production growth slowed due to the shutdown of the cracked Forties pipeline.”

On a month-on-month basis, total production output fell 1.3 per cent as the Forties shutdown sent mining and quarrying down 19.1 per cent, although it grew for the whole of 2017 by 2.1 per cent year-on-year, bolstered by a 2.8 per cent growth in manufacturing.

Additional ONS data showed a 0.7 per cent drop in output from Britain’s’ construction industry over the three months to December – the third straight quarterly decline, which the ONS said marked the longest fall in quarterly construction output since 2012.

However, on a month-on-month basis, output grew 1.6 per cent in the final month of 2017.

Black said: “Construction was broadly flat across 2017, thanks to a strong December. However, house building and infrastructure were the only bright spots, with all other areas of the industry falling back throughout the year.”

Currency markets took a dim view of the figures, which sent the pound down 0.2 per cent against the US dollar and euro to 1.388 and 1.132 respectively.

“On the face of it, (it is) a mixed set of December data for the UK economy, but this masks a more positive underlying picture,” said Howard Archer, chief economic adviser for the EY Item Club.

“The positives were ongoing marked strength in manufacturing output and a welcome pick-up in construction output – although this was not enough to prevent clear contraction over the fourth quarter.”

While the pipeline closure contributed to negative results in the trade deficit and industrial production, Archer said it was unlikely to result in a downward revision to gross domestic product (GDP).

“Overall, the data do not point to fourth-quarter 2017 UK GDP growth of 0.5 per cent quarter-on-quarter being revised.

“Modestly lower growth in industrial production than estimated was countered by smaller construction contraction.”