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UK goods trade deficit smallest since mid-2006

BRITAIN’S goods trade deficit narrowed sharply in February to its smallest since June 2006, after exports rebounded strongly from weather-related weakness in January, official statistics showed yesterday.

Britain’s goods trade gap with the rest of the world fell to £6.179bn in February, much narrower than the £7.35bn economists had forecast and down from January’s 17-month high of £8.07bn. Exports jumped by 9.5 per cent in February, the biggest monthly increase since January 2003, helped by a surge in overseas chemicals sales which rose to an all-time high.

The positive UK data was in stark contrast to that from the US, which saw its trade gap in February widen to $39.7bn (£25.8bn) due to a jump in consumer goods imports.

US imports grew 1.7 per cent during the month to $182.9bn, but this rise was offset by exports which edged just 0.2 per cent higher to $143.bn. However it was still the best showing since the depths of the global financial crisis in October 2008.

Analysts had expected the trade deficit to widen to around $38bn, and warned the slightly bigger-than-expected deficit could prompt analysts to cut their estimates for first quarter US economic growth.