The non-EU trade deficit was pounds 500m in November, down from the record pounds 1.2bn in October and half what the markets had been expecting. Official statisticians said that the trend deterioration in the balance had halted.
Exports jumped by pounds 500m to reach a record pounds 5.8bn. Erratic items - principally the sale of a warship to Saudi Arabia - accounted for half the rise in exports. But the underlying volume - stripping out erratics and oil - rose by 5 per cent.
The increase in exports was to all areas outside the European Union. Sales to North America increased by pounds 100m and have now risen by 11 per cent in the last three months compared with the previous three.
There was a particularly sharp jump in the volume of finished manufactures. These rose by 7 per cent in the three months ending November compared with the previous three months.
"If the world performs - and this month's data suggest the US is buying again - then so, too, will manufacturing industry," said Geoffrey Dicks, UK economist at NatWest Markets.
Exporters cut their prices for finished goods in November. In the three months ending November, prices rose by just 1 per cent compared with the previous three months. This contrasted with an 8 per cent increase on last year. This, said Mr Dicks, suggested that "UK exporters are pricing more aggressively to obtain sales in a difficult world environment."
Imports fell by pounds 200m to pounds 6.3bn. The fall was concentrated in part-finished goods, implying that the long-awaited rundown in inventories has begun. "This is the first significant evidence that manufacturers are no longer rebuilding stocks," said Adam Cole, UK economist at James Capel.
The principal concern now is that the upturn in exports to countries outside the EU will be offset by a downturn in exports to the EU as demand weakens on the Continent.
A survey by Royal Bank of Scotland revealed that smaller exporters have become less optimistic about export prospects in the next year, mainly because of worries about sales to Continental Europe.Reuse content