- Vicky Redwood, chief UK economist at Capital Economics
The UK's trade deficit with the rest of world shrank more than expected in April, which might boost the UK economy. The British economy logged a 1.2 billion pound trade gap, down from 3.1 billion pounds in March. City analysts had pencilled in a decline to just 2.6 billion pounds. Exports remained flat following the 0.3% growth in the March quarter, while imports increased 2.1%, the same rate of growth as in the three months to March.
The Office for National Statistics revised down the first-quarter trade shortfall by 219 million pounds, while trade gap for the final two quarters of 2014 remained unchanged. The UK's trade deficit in the first quarter of the year is estimated to have knocked 0.9 percentage points off the growth rate, reduced to its slowest pace in over two years. British exporters have struggled due to weak demand in the Euro zone, the UK's top trading partner, and Sterling's appreciation to its strongest on a trade-weighted basis since August 2008. Yet data offered some hope of a turnaround, with export volumes in April alone surging by 4.8%, the biggest increase since September 2014.With signs that Euro zone's growth is now picking up, prospects for UK trade and the broader economy were looking brighter.
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