Trade figures ease economy fears

Upbeat trade figures allayed worries over the UK economy today after the country cut its global goods deficit to a lower than expected £7.4 billion in June.

Most of the £600 million fall was accounted for by the European Union - the UK's biggest trading partner - where the gap narrowed £400 million after a £100 million rise in exports and a £300 million import slide.

Total exports jumped £900 million or 4.3 per cent to £22.4 billion over the month, against a £300 million or 1per cent rise in imports.

The figures offer some cheer after the Royal Institution of Chartered Surveyors said house prices fell for the first time in a year in July and the British Retail Consortium reported a sharp slowdown in sales growth.

They also offer some hope the UK is moving towards its much-vaunted rebalancing away from imports and spending.

Howard Archer, chief economist with IHS Global Insight, said: "The hope must be that UK exporters are finally starting to benefit from sterling's weakness and that this will help prop up growth over the coming months."