BRITAIN'S trade gap unexpectedly narrowed in September as exporters benefited from a weak pound, figures published yesterday revealed.
But experts warned that the trend may be short-lived as the global economy slows.
The Office for National Statistics said the deficit on trade in goods and services shrunk to £3.9 billion from £4.4bn in August and £4.8bn in July. Analysts had been
expecting a September reading of about £4.7bn.
The figures represent a rare bit of good news on the UK economy and suggest a weaker pound is boosting demand for British goods overseas and hampering import activity.
Matthew Sharratt, an economist at Bank of America, said: "It is probably too early to say that the low level of sterling is boosting exports and clamping down on imports, but that is potentially a trend that is at work here."
Analysts point out that slowing economic activity across the world could exact a toll on the trade balance in the new year.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "While UK exporters will benefit from the markedly weaker pound, this seems certain to be increasingly countered over the coming months by very weak domestic demand in key overseas markets."
Yesterday's report showed that Britain's goods-only trade gap narrowed to just below £7.5bn in September from £8bn in August. Economists had forecast a deficit of £8bn.
Total exports of goods rose 3 per cent to £21.9bn and total imports lifted 0.5 per cent to £29.3bn. Imports from non-European Union countries actually fell 3 per cent in September.
Analysts have been treating Britain's trade data over recent years with caution because of distortions caused by VAT fraud. However, the ONS said the effects of this fraud had eased somewhat.
The full article contains 311 words and appears in The Scotsman newspaper.
