The U.K. trade deficit narrowed more than economists forecast in June as exports rose to a two-year high.
The goods-trade gap shrank to 7.4 billion pounds ($11.7 billion) from 8 billion pounds in May, the Office for National Statistics said today in London. The median of 17 forecasts in a Bloomberg News survey was for a 7.8 billion-pound deficit. Exports jumped 4.3 percent to the highest since June 2008, and imports rose 1 percent.
The pound has fallen about a quarter on a trade-weighted basis since the start of 2007, making exports more competitive. While economic growth accelerated in the second quarter, Bank of England Governor Mervyn King said there are risks from a possible euro-area slowdown. Policy makers may lower their growth forecasts tomorrow after last week maintaining emergency stimulus, according to economists in a Bloomberg News survey.
“At the margin this is a small improvement, but the data are volatile,†said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “There are questions over how sustainable the recovery is in export markets. There’s a sense there’s been a loss of momentum.â€
The pound rose as much as 0.1 percent against the dollar after the report, and was trading at $1.5820 as of 9:44 a.m.
