Stunned City economists, who had expected a deficit of pounds 1.5bn, concluded that the figures were probably too good to be true. They argued that such a small deficit was implausible when recovery in Britain should be boosting spending on foreign goods and recession in Europe should be depressing demand for our exports.
The narrowing in the trade gap was welcomed by the Treasury, which was also cheered by figures showing that manufacturers stepped up production by 0.4 per cent in September.
The trade figures were delayed from Wednesday as statisticians reassessed earlier data for trade within the European Union, which has been measured through VAT returns rather than Customs declarations since the start of the year. August's pounds 310m surplus for trade with the EU is the largest since the early 1980s.
The Central Statistical Office said its earlier fear that the trade deficit had stopped narrowing now seemed unfounded and that the cumulative trade gap for the year so far was smaller than had previously been estimated. The CSO added that import volumes appeared to have been falling slowly since the start of the year, but that export volumes had turned up again since the spring.
Manufacturing output, page 21
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