UK goods trade deficit falls sharply in October

The UK´s total trade deficit fell more quickly than expected in October as the shortfall in its trade in goods dropped sharply.

Trade in goods and services registered a deficit of -£2.0bn in October, down from -£5.8bn in the previous month, according to the Office for National Statistics.

Economists had forecast a deficit on the country´s trade in goods of -£11.9bn.

Britain´s shortfall on international trade in goods dropped from -£13.8bn to -£9.7bn while the surplus on its trade in services slipped from £8.0bn to £7.7bn.

In terms of quarterly rates of change, between the three months to July 2016 and the three months to October 2016 the total trade deficit increased by £4.7bn to £13.2bn.

Commenting on the data, Martin Beck, senior economic advisor to the EY ITEM Club, said: "A trade deficit of £2bn in October was the smallest since May and represented a hefty £3.8bn narrowing on the shortfall recorded the previous month. In fact, this narrowing was the biggest since records began in 1998.

“While this could be a sign of the benefits of the weaker pound coming through, trade numbers are notoriously volatile. Interpreting the latest data is made even more problematic by corrections the ONS has made to past errors in the measurement of trade in erratics, particularly gold, for the period from January 2015 to September this year."