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UK trade deficit narrows sharply in Jan on booming services, oil price fall

[LONDON] Britain's overall trade deficit narrowed to its smallest since mid-2013 in January, helped by a surge in exports of services and the plunge in oil prices, official data showed on Thursday.

The Office for National Statistics said the total deficit shrank to 616 million pounds from 2.14 billion pounds in December.

The deficit in goods trade also narrowed to 8.41 billion pounds, its smallest since March of last year.

Economists had forecast a gap of 9.7 billion pounds in the goods trade balance.

Britain has relied on domestic demand to propel its economic recovery since the middle of 2013.

But there have been signs of improvement recently and Thursday's figures will give fresh hope to government that it is making progress towards weaning the country off its reliance on domestic consumers.

Britain's trade in services recorded its biggest ever monthly surplus of 7.80 billion pounds in January with exports hitting a record high of just over 18 billion pounds.

Britain's goods trade deficit with countries in the 28-nation European Union narrowed slightly to 6.67 billion pounds.

The shortfall with non-EU countries was almost halved from its level in December as it slid to 1.74 billion pounds, compared with forecasts for a gap of 3.4 billion pounds in a Reuters poll.