WRAPUP 1-Dire UK exports casts doubt on recovery outlook

* UK goods exports fall at fastest pace since July 2006

* UK Jan goods trade deficit widest in 17 months

* BRC reports rebound in retail sales after Jan fall

* RICS house price balance in biggest monthly fall since 08

By Fiona Shaikh and David Milliken

LONDON, March 9 (Reuters) - Britain's biggest export fall in more than three years and lacklustre retail and house price surveys cast doubt on the strength of economic recovery on Tuesday, the day after a Bank of England policymaker warned of a bumpy outlook.

While some weakness in the data may be due to Britain's harshest winter in at least 30 years -- which kept consumers away from shops, prevented exports reaching ports and discouraged homebuyers -- economists were concerned much of the softness could last.

"The outlook for the overall economy remains pretty bleak," said Vicky Redwood, economist at Capital Economics.

Britain's goods trade deficit increased by almost 1 billion pounds in January to 7.987 billion pounds ($11.97 billion), after exports fell 6.9 percent, the biggest monthly drop since July 2006, the Office for National Statistics said, despite a weak pound.

Meanwhile, the British Retail Consortium said a 2.2 percent annual rise in retail sales in February was merely a reversal of January's weather-related fall rather than a sign of a revival in consumer demand.

And the Royal Institution of Chartered Surveyors' house price balance slumped to +17 last month as a rise in the number of properties being put up for sale outstripped demand.

"January's trade figures suggested that the much needed pick-up in the external sector is still not in evidence," said Redwood.

Most experts expect economic growth of around 1 percent this year, the lower end of the 1-1.5 percent range pencilled in by the Treasury and suggesting that GDP will not pick up much beyond the 0.3 percent expansion recorded at the end of last year.

"In terms of GDP during 2010, it is increasingly looking like net trade may not provide that much impetus to growth after all," said Colin Ellis, economist at Daiwa Securities.

DISAPPOINTING TREND

Policymakers have been counting on sterling's more than 20 percent trade-weighted fall from two years ago to jump-start demand for British goods abroad and facilitate a much-needed rebalancing of the economy away from consumer-led demand.

And the government will have to take an axe to public spending in the near future, removing a further prop to growth, amid mounting pressure from investors to curb its record borrowing.

Ratings agency Fitch said it was "uncomfortable" with the current fiscal tightening plans and said Britain's sovereign credit profile had deteriorated.

And Bank of England policymaker Kate Barker said in a speech late on Monday that exports had so far had been "disappointing" given the sharp fall in the pound.

"With the public sector now seeking to reduce its own deficit, concern over likely improvement in the UK's external balance would suggest that a fast recovery in the UK would only be possible if the household and corporate sector balance sheets were to deteriorate," she said.

Nonetheless, other recent surveys have painted a brighter outlook for exports, with the latest purchasing managers survey showing manufacturers' export orders rose at their fastest pace in at least 14 years, and giving hope that an improvement in the trade balance may yet appear.

And although the RICS and other recent house price surveys showed prices dipped in February, that could prove to be a weather-related blip, leaving the market on track for modest growth this year.

"With business surveys continuing to do quite well, we suspect the RICS survey is not a signal of a broad-based slowdown in activity, but reflects factors more specific to housing," said Michael Saunders, economist at Citi. (Editing by Ruth Pitchford/Susan Fenton)