–Jan global goods deficit Stg7.057bn vs Stg9.686bn in Dec
–Jan global goods/services deficit Stg2.95bn vs Stg5.475bn in Dec
–Jan global goods deficit ex oil/erratics Stg7.556bn vs Stg8.215bn Dec
–Jan global goods deficit median forecast Stg8.5bn; total Stg3.9bn

LONDON (MNI) — The UK’s trade in goods deficit narrowed sharply in
January, following a record shortfall in December, as exports of oil
increased, according to figures released by National Statistics
Wednesday.

The trade in goods gap narrowed to Stg7.057 billion in January from
Stg9.686 billion in December, the lowest since February 2010 and below
the median forecast for a Stg8.5 billion shortfall.

While the sharp decline in the trade deficit may prompt speculation
that the UK economy appears at last to be showing the long awaited
rebalancing towards exports that economists have long hoped for, the
detail shows that the headline figures overstate the improvement.

Exports of goods were up 5.4% on the month in January, compared
with a fall of 4% in imports. Much of the good news on exports, however,
came from an 18.6% increase in oil exports which hit a record high of
Stg3.559 billion, putting the oil account into surplus to the tune of
Stg118 million. Oil exports are notoriously erratic and usually show a
deficit so this is unlikely to continue.

The plunge in imports this month was also partially due to a large
decline in imports of erratic items which fell 55.5% to Stg1.221 billion
from Stg2.744 billion in December.

Excluding oil and erratic items the underlying deficit fell to
Stg7.556 billion from Stg8.215 billion, a welcome fall, but not quite as
headline grabbing and in line with recent monthly outturns.

While National Statistics said there was not much evidence that the
severe weather had made a significant impact on the trade data during
December and January, it seems likely that the weather was responsible
for at least some of the record December shortfall and the subsequent
bounceback in January.

Including services the total trade shortfall narrowed to Stg2.95
billion in January from Stg5.485 billion in December, below the median
forecast for a Stg3.9 billion deficit.

–London newsroom: 020 7862 7492; email: drobinson@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MT$$$$,MABDS$]