More signs that euro zone woes and the strong pound are hurting British firms have emerged after official figures showed a faster downturn in exports. 

The UK's trade deficit in goods and services narrowed to £1.9 billion in August, down from £3.1 billion in July and the lowest since March, but this was due to lower imports rather than an upturn in exports. 

Goods exports fell £700m, or 2.8%, in the month to £23.2 billion, with the figure on a three-month basis the largest decline since March. 

Over the same month-on-month period, imports of goods decreased by £2 billion to £32.3 billion - the largest fall since July 2006 and reflecting declines in volatile areas such as imports of aircraft, fuels and chemicals. 

"It's easy to see why exports are declining. Growth has slowed sharply in the euro zone, with even Germany facing the possibility of a renewed recession, " commented Markit chief economist Chris Williamson. 

"Sanctions with Russia are clearly hurting European trade, while domestic demand in many euro countries remains in the doldrums, reflecting weak business confidence and high unemployment. In addition, just as demand is slumping, sterling's appreciation is making UK goods less competitively priced in overseas market," he added. 

Sterling is now almost 2% lower than it was at its July peak but it has continued to climb against the euro to a level 8% higher than a year ago. 

Meanwhile, separate figures from the Office for National Statistics showed that output in the construction industry was estimated to have fallen by 3.9% compared with July. 

This was offset by a large upward revision to the previous month's figure and comes despite other upbeat survey data from the sector.