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UK trade deficit narrows in April
[ LONDON] Britain's trade deficit narrowed more sharply than expected in April after a record monthly jump in goods exports, offering a hint that a weak recent trade performance may be turning a corner.
The Office for National Statistics said Britain's total trade deficit narrowed to US$4.76 billion in April from an downwardly revised US$5.11 billion in March, its lowest level since September 2015.
Britain's large current account deficit hit a record 7.0 per cent of the economy in late 2015, which the Bank of England has said potentially leaves Britain vulnerable if the country votes to leave the European Union in a referendum on June 23.
However much of the deficit is due to the weak performance of British overseas investments, rather than its trade deficit.
The deficit in goods alone narrowed to US$15.24 billion from US$15.41 billion, compared with economists' forecasts for it to hold broadly steady at the original March estimate of US$16.22 billion.
Goods export volumes jumped 11.2 per cent on the month, the biggest rise since records started in 1998, taking the total value of goods exports in April to US$37.83 billion, not far from an all-time high set in June 2013.
British economic growth slowed to a quarterly rate of 0.4 per cent in the first three months of 2016, down from 0.6 per cent in the last three months of 2015, with Britain's trade deficit accounting for an increased drag.
The ONS said that revisions to March trade data pointed to less of a drag on GDP from trade than first estimated.
Thursday's figures showed that goods export volumes in the three months to April rose by 4.3 per cent after dipping 0.1 per cent in the first quarter of the year, the biggest increase since the three months to June 2013.
Higher exports of chemicals, oil and machinery - as well as aircraft, which can lead to outsize jumps in volumes - lay behind much of the rise, the ONS said. The value of aircraft sold in the three months to April was an all-time high.
Goods imports volumes rose by 4.6 per cent after a 0.9 per cent increase in the first quarter.
The stronger ONS data tally with a recent more upbeat message from some private-sector surveys. Factory export orders were above their long-run average in April and May, according to the Confederation of British Industry, and industrial output staged its biggest jump in nearly four years.
Sterling fell to its lowest since late 2013 on a trade-weighted basis in April, but falls in the cost of British exports are typically slow to trigger a boost in foreign demand.