Trade deficit narrows as exports hit record high

Britain's trade deficit narrowed at its fastest pace since records began in October, as the value of exports hit a record high, official data showed.

The figures provide a glimmer of hope for Britain's flagging economy, but are unlikely to alter expectations that the Bank of England will have to inject more stimulus to support growth.

The Office for National Statistics said Britain's goods trade deficit narrowed to £7.557bn in October from a record £10.175bn in September. That was the biggest monthly fall in the deficit on record, and beat economists' forecasts for a reading of 9.4 billion pounds.

The goods trade gap with non-EU countries also narrowed to £4.554bn in October from £5.712bn in September and against forecasts for a deficit of £5.5bn.

Separate figures showing producer output prices eased as expected in November will likely reassure policymakers that inflation pressures are easing.

The Office for National Statistics said producer output prices rose by 5.4 per cent on the year, down from 5.7 per cent in October, in line with forecasts.

Input prices were 13.4 per cent higher on the year, compared with 14.3 per cent in October and against forecasts for an annual rate of 13.2 per cent.

The Bank on Thursday voted to keep on with the £75bn quantitative easing programme it relaunched in October, but most analysts expect it will inject more stimulus in February when that runs out, to shore up a rapidly slowing economy.

The central bank expects consumer price inflation to fall back sharply next year from the current 5 percent, with weak growth likely to push it below its 2 percent target over the next 18 months.