Britain’s overall trade deficit narrowed to its smallest since mid-2013 in January, helped by a surge in exports of services and the plunge in oil prices, official data showed yesterday.

The Office for National Statistics said the total deficit shrank to £616 million from £2.14 billion in December.

The deficit in goods trade also narrowed to £8.41 billion, its smallest since March of last year.

Economists had forecast a gap of £9.7 billion in the goods trade balance.

Britain has relied on domestic demand to propel its economic recovery since the middle of 2013. But there have been signs of improvement recently and yesterday’s figures will give fresh hope to the government that it is making progress towards weaning the country off its reliance on domestic consumers.

Britain’s trade in services recorded its biggest ever monthly surplus of £7.80 billion in January with exports hitting a record high of just over £18 billion.

Britain’s goods trade deficit with countries in the 28-nation EU narrowed slightly to £6.67 billion.

The shortfall with non-EU countries was almost halved from its level in December as it slid to £1.74 billion, compared with forecasts for a gap of £3.4 billion in a Reuters poll.