Britain's goods trade deficit narrowed more than expected to a four-month low in June as exports jumped, rekindling previously forlorn hopes the economy might be rebalancing.
However, economists remained cautious.
The Office for National Statistics said today the goods gap shrank to £7.401 billion from £8.028 billion in May. Analysts had forecast a drop to £7.8 billion.
The deficit with non-EU countries narrowed to £4.262 billion from £4.492 billion, broadly as expected.
The total trade deficit, which includes services, narrowed to £3.260 billion from a 22-month high of £3.818 billion in May. As with the goods deficit, this was the best reading since February.
Britain's trade performance has been disappointing of late, with sterling's slide since 2007 having failed to offset weaker demand from Britain's trading partners.
Today's figures rekindled hopes that a long-awaited rebalancing of the economy could still happen, though analysts were reluctant to read too much into one month's release of what is often a volatile series.
Goods exports to non-EU countries were the highest on record at £10.750 billion and exports to the world as a whole were the highest since July 2008 at £22.444 billion.
The improvement in the global goods trade deficit was driven by stronger oil and chemical exports and reduced imports of cars.
A breakdown by country showed the biggest improvement in export performance was to the United States, while the biggest rise in imports was from Norway.
Overall, the value of UK goods exports rose 4.3 per cent on the month, while the value of goods imported into Britain rose 1 per cent.
Reuters