The figures came as a slight disappointment to the markets, but did nothing to dent the belief that a cut in interest rates will have to wait some weeks. The FT-SE index of 100 leading shares closed 5.4 points lower at 3,440.6. The pound edged to its highest level against a basket of other currencies since it left the European exchange rate mechanism in September 1992.
The latest survey of businesses by Dun & Bradstreet contained less welcome news for the Government on inflation. Confidence on orders and exports rose while a third of the 1,900 managing directors questioned expected to raise their prices over the coming quarter, well up on three months ago.
Imports of visible goods from the European Union exceeded exports by pounds 206m in October, a second successive monthly deterioration. But the trade deficit with the whole world almost halved to pounds 578m because of a previously published improvement in the non-EU deficit. The whole world deficit has fluctuated wildly in recent months but remains on an improving trend.
City economists have been sceptical about the accuracy of the trade figures since the beginning of the year, when trade within the EU was first measured from VAT returns rather than customs declarations.
John Marsland, of UBS, believes that imports from within the EU may be underestimated by as much as pounds 9bn for the first 10 months of last year. Import volumes from the EU fell sharply last year, but rose from outside.
But the CSO said the new measurement system meant some EU imports were now being recorded as non-EU imports, which would help to explain the differing trends.
October's whole-world figures showed improvements in trade in most types of good. Trade deficits with France and Benelux countries widened, but the deficit with Germany narrowed and the surplus with the rest of the EU increased.
Exporters are becoming more confident about trends in both the short and long term, according to a new survey by Gallup for DHL, the distribution company. Exporters welcomed the Gatt agreement but warned of the dangers of slow growth in European markets.
Signs that growing consumer spending could suck in more imports came with November's credit business figures, showing that lending to consumers remains on an upward trend despite net lending falling for a second month. Consumers borrowed pounds 290m more than they repaid in November, including a sharp fall in lending by finance houses. Total credit rose to a record pounds 4.9bn, having fallen in October.
The Treasury and the Department of the Environment seized on the latest housebuilding figures as evidence of a 'healthy trend recovery'. Some 15,900 houses were started in November, up from 11,000 in the same month last year. Completions rose to 16,500 from 14,900.
Trade Indemnity, the credit insurance group, forecast that business failures in the fourth quarter last year would be 46 per cent down on the same period in 1992 at 942. These statistics refer to companies in which Trade Indemnity's policyholders have been involved.
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