The damage to British business from eurozone financial turmoil has been laid bare by a surge in the UK's trade deficit to a record high.

In a blow to the government's aspirations for exports to lead a recovery, the trade gap – the difference between imports and exports – widened to almost £10bn in September, prompting warnings that already lacklustre economic growth for the third quarter will be downgraded.

On Wednesday the trade and investment minister Lord Green conceded the latest trade figures were "disappointing" but said that against the backdrop of a volatile EU trade market, the government was working on boosting trade with emerging markets.

Chiming with surveys showing falling overseas orders for the UK's factories, exports to the world as a whole barely grew while the value of goods going to the eurozone countries fell, according to the Office for National Statistics (ONS).

The numbers compounded a deteriorating trade trend which has seen the deficit in the value of goods traded widen for five of the last six months – despite a depreciation in the pound which should make UK goods more competitive.

"These figures are every bit as bad as we feared they might be," said Nida Ali, economic adviser to the Ernst & Young Item Club. "Adverse developments in the eurozone are clearly taking their toll on export growth which has decisively faltered."

The fall in exports contrasted with a rise in imports to a record high. That left the country's goods trade deficit with the rest of the world at £9.8bn, much wider than the £8bn forecast by economists and the biggest trade gap since records began in 1998. The gap was £8.6bn in August.

While the overall deterioration in trade was likely to see the ONS cut its previous estimate for third quarter growth of 0.5%, there was some positive news, economists said.

Imports jumped 3.8% in September driven by higher demand for chemicals, oil and silver. "The silver lining here is that we are importing a lot of stuff and you don't tend to do that unless your consumers are spending or your manufacturers are bolting stuff together so there is a glimmer of hope," said Alan Clarke at Scotia Capital.

International trade in services – such as banking and insurance – was also quite strong, with a surplus of £5.9bn in September.

However, the deterioration in the value of goods traded still left the UK's total trade deficit a much wider £3.9bn compared with £2.7bn in August.

The official data echoed survey evidence that Britain's exporters are seeing orders fall as the eurozone sovereign debt crisis breeds uncertainty in their key market.

Economists said worse was likely to come.

"With the eurozone problems no closer to being resolved, we continue to doubt that the UK's external sector will prevent the economy from sliding back into recession," said Vicky Redwood, chief UK economist at thinktank Capital Economics.

Most forecasters expect the UK economy to stall at best and contract at worst in the final months of this year, as cuts at home and uncertainty in the eurozone knock business and consumer confidence.

The business lobby group the CBI said it expected no growth at all in the final quarter of 2011 and it had cut its forecast for 2012 growth to 1.2%, from the 2.2% it had previously pencilled in.

"We still think we can avoid a double dip, but the risks have increased," said Ian McCafferty, the CBI's chief economic adviser.

Commenting on the record trade gap, Labour's shadow chief secretary to the Treasury, Rachel Reeves, said the government had taken spending cuts and tax rises too far.

"The government's reckless policies over the last year have left us badly exposed as the eurozone crisis deepens as eurozone leaders and the European Central Bank fail to take the necessary action," she said.