British trade deficit narrows

Britain’s trade deficit shrank by more than expected in February as exports hit a record high for a second straight month, official data showed yesterday, sparking hopes of a return to economic growth.

The deficit – the difference between goods exported and imported – shrank to £6.8 billion (€7.6 billion) in February, the Office for National Statistics (ONS) said.

That was the lowest level since February 2010 and compared with forecasts for a larger deficit of £7.8 billion, according to analysts polled by Dow Jones Newswires. The February reading compared with an upgraded deficit also of £7.8 billion in January.

“The unexpected further narrowing of the trade deficit in February is a boost for hopes that net trade will make a very decent contribution to GDP growth in the first quarter of 2011,” said economist Howard Archer at the IHS Global Insight consultancy.