UK trade deficit narrows to 13-month low as Eurozone GDP growth sticks at 0.4 per cent

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The UK's trade deficit – the gap between its imports and exports – narrowed to its smallest in 13 months in April, figures published today showed.

The deficit more than halved to £1.2bn in April, compared with £3.1bn in March. Total exports rose 1.2 per cent between March and April, while imports fell 3.1 per cent. 

Broken down by industry, the deficit on goods hit £8.6bn, while the services sector created a £7.4bn surplus.

Exports to the US rose 23 per cent during the month, while goods sent to the Eurozone rose by a modest 0.6 per cent, suggesting sterling's strength against the euro could be holding up trade with European economies. 

After figures published last month showed the UK grew just 0.3 per cent in the first quarter of 2015, the figures will provide hope for markets.Howard Archer, the chief European and UK economist at IHS, suggested trade could "very well make a positive contribution to growth". 

"However, the strength of the pound against the euro threatens to continue to constrain the upside for UK manufacturing exports to the Eurozone. Both the manufacturing purchasing managers and the CBI indicated in their May surveys that sterling’s strength continues to be challenging for UK manufacturing exporters."
 
Markit's Chris Williamson added that rock-bottom oil prices had helped. 
 
“Lower oil imports, linked to the 50% slump in the price of crude over the past six months, are helping to reduce the UK trade deficit.
 
"However, dig deeper into the numbers and a more disappointing picture of UK export performance emerges. The export trend for manufacturers has weakened in a sign that the strong pound is hitting demand for UK goods in overseas markets. Further export losses look likely in coming months, dealing another blow to hopes that the UK economy is rebalancing away from domestic consumption towards exports."
 
Meanwhile, figures by Europe's official statistics agency confirmed that Eurozone growth was 0.4 per cent in the first quarter of this year.