Investing.com - The U.K.’s goods trade deficit narrowed more than expected in January, official data showed on Thursday.
In a report, the U.K. Office for National Statistics said the country's goods trade deficit narrowed to a seasonally adjusted £8.41 billion in January from a deficit of £9.93 billion in December. Economists had expected the goods trade deficit to narrow to £9.7 billion in January.
Seasonally adjusted, the U.K.’s deficit on trade in goods and services was estimated to have been £0.6 billion in January, compared with £2.1 billion in December. This reflects a deficit of £8.4 billion on goods, partially offset by an estimated surplus of £7.8 billion on services.
The sharp narrowing of the deficit reflects a fall of £2.5 billion in imports. Almost half of this fall (£1.2 billion) is attributed to oil imports.
In the 3 months to January, the U.K.'s deficit on trade in goods and services was estimated to have been £4.4 billion. The latest 3 monthly deficit is the smallest since the 3 months to October 2000.
This mainly reflects a 7.3% rise in exports of goods to countries outside the European Union and falls in imports of goods from both EU and non-EU countries.
U.K. trade data shows the extent of import and export activity, a key contributor to the overall economic growth of the U.K.
GBP/USD was trading at 1.4976 from around 1.4966 ahead of the announcement, while EUR/GBP was at 0.7077 from 0.7082 earlier.
Meanwhile, European stock markets remained mostly lower. London’s FTSE 100 rose 0.85%, the EURO STOXX 50 shed 0.3%, France's CAC 40 dipped 0.15%, while Germany's DAX slipped 0.35%.