The trade deficit narrowed in October for the first time since the Brexit vote - but not because of weak sterling

Emma Haslett
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Container Ships Unload At Tilbury Port
The UK's trade deficit was narrower in October (Source: Getty)

The trade deficit narrowed to £2bn in October, new figures have shown - although it's unlikely it was thanks to the weak pound.

The figure, published by the Office for National Statistics (ONS) this morning, was down from £3.8bn in September last year - and driven by exports, which rose £2bn, while imports fell by £1.8bn.

But the ONS said it was unlikely the weak pound had driven the rise in exports. A three-monthly analysis of the figure showed the trade deficit widened by £4.7bn to £13.2bn, largely thanks to an increase in the amount material manufacturers spent, as well as an increased cost of machinery.

Read more: Britain must look beyond trade deals to turbocharge exports

"It needs to be remembered that the data can be highly volatile and subject to significant revision," pointed out Howard Archer, chief UK and European economist at IHS Global Insight.

Indeed, earlier this week the ONS was lambasted after it admitted to a maths blunder which meant the trade deficit was £6bn higher than it had originally suggested.

"The hope for the UK economy going forward is that the substantial overall weakening of the pound since the UK voted to leave the European Union in June’s referendum will increasingly feed through to boost foreign demand for UK goods and services," Archer added.

"This is all the more important given the weakening prospects for domestic demand due to likely deteriorating consumer fundamentals and increased uncertainty when the UK starts the Brexit process by triggering Article 50."

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