Britain's goods trade gap with the rest of the world narrowed by more than expected in January to its smallest in more than a year, official data showed this morning, as imports fell and exports outside the EU surged.
The Office for National Statistics said that Britain's goods trade gap narrowed to £6.2 billion from £6.95 billion in December, the smallest deficit since October 2005. Economists had forecast a deficit of £6.9 billion.
The goods trade gap with non-EU countries narrowed to £3.7 billion from £4.3 billion in December. The data indicated that sterling's strength may not be damaging Britain's terms of trade as much as feared.
The ONS said exports to EU countries - which now include Bulgaria and Romania - fell 3.5% but exports to non-EU countries leapt 6%. Imports from the EU fell 3.5% and imports from the rest of the world fell 2%.
Britain's trade figures are distorted by the effects of VAT carousel fraud in which the culprits repeatedly import and export the same high value goods. Economists say the data are therefore an unreliable indicator of what is happening in the economy.
