Britain's trade gap in goods shrank unexpectedly in September as exports hit their highest in two years despite the highest oil deficit in decades.
But economists cautioned against reading too much into the data due to monthly fluctuations. "While the figures are indeed much improved on September's report we know how volatile they can be," said George Buckley, UK economist at Deutsche Bank.
Tuesday's figures from the Office for National Statistics showed the goods deficit shrank to 4.55 billion pounds in September against 5.16 billion pounds in August and market expectations of 5.1 billion pounds.
The main reason for the improvement was a pick-up in exports to countries outside the European Union, the ONS said.
"This highlights the continuing softness of domestic demand in much of the region, particularly the eurozone," said Howard Archer, economist at Global Insight consultancy.
Overall exports rose to 16.5 billion pounds, their highest since May 2002. But in a sign of robust domestic demand, imports also hit a record monthly high of 21.1 billion pounds.
While some of the exports' rise may be due to sterling's recent depreciation, the ONS noted such hikes in exports were often reversed in future months due to normal data fluctuations.
"Sterling started falling in August and I don't think it would be quick enough to respond to that," Buckley added.
The pound rose against the dollar and the euro on the data.
The oil trade balance swung into deficit for the first time since August 1991, posting a shortfall of 254 million pounds.
Describing this as probably the highest oil deficit since the mid-1970s, the ONS attributed it to summer maintenance work in the North Sea having been deferred until September.
Some, however, viewed it as part of a wider change.
"It is a structural trend decline as the UK oil reserves gradually disappear," said John Butler, economist at HSBC. "In time the UK will be a permanent net importer of oil."
Britain has traditionally maintained a surplus on its oil balance thanks to its extensive North Sea reserves.
Oil trade deficits were previously reported for July and August, then revised away. September's shortfall was, however, much bigger.
Analysts said the new trade data sat uneasily with poor official figures for manufacturing output.
"If we're not producing anything...one has to wonder where these exports are coming from," said Ross Walker, UK economist for RBS Financial Markets.
Butler agreed: "The rise in export volumes is primarily for manufactured goods, up a big 4.1 percent over the past 3 months - that is another piece of evidence that raises a question mark about the reliability of the 1.5 percent fall in the official estimate of manufacturing output."
Alan Castle, UK economist for Lehman Brothers, said regional data splits made it hard to make an argument for pronounced strength in UK exports.
"It is hard to put a lot of weight on today's numbers - there is a high probability that there is some payback in the October data."
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