Britain's global goods trade deficit narrowed more than expected in November as exports surged, although the gap remains on a widening trend and is set to reach a record for the year in 2004. The Office for National Statistics said on Wednesday that the goods trade deficit narrowed to 4.6 billion pounds in November from a downwardly-revised 5.0 billion sterling in October, and was much less than the 5.1 billion that economists had expected.
That narrowing came as goods exports rose 4.3 percent to 16.9 billion pounds, their highest monthly total since May 2002, driven particularly by exports of petroleum products and chemicals, the ONS said.
The goods trade gap with the 25-nation EU narrowed sharply to 1.88 billion pounds in November from 2.12 billion, its smallest since May 2003. Analysts noted this coincided with a depreciation in sterling against the euro.
But the sudden narrowing in the trade gap, which has been volatile over recent months, did not alter widespread expectations that the Bank of England's Monetary Policy Committee will leave interest rates unchanged at 4.75 percent this week and for months to come.
"This smaller than expected deficit should provide some temporary relief for sterling and implies that net trade will be less of a negative for fourth quarter GDP," said John Butler, UK economist at HSBC. "(But) this release does nothing to alter the expectation that the Bank of England keeps rates on hold at tomorrow's meeting," he said.
The pound crept higher after the figures were released, trading near $1.873 while British government bonds and short sterling interest rate futures were unfazed by the data.
Imports hit a record monthly high of 21.5 billion pounds, driven in November by oil and natural gas imports, the ONS said.
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