UK trade deficit shrinks to seven-month low in October

The UK trade deficit narrowed to a seven-month low in October of £9.6bn from £10.5bn the month before, according to the Office for National Statistics on Wednesday.

The decline was prompting by dropping oil imports after the commodity’s price index plummeted this autumn, though economists had forecast a smaller gap of £9.5bn.

Imports fell by £0.7bn during October, boosted by a £0.9bn decrease in fuel imports from outside the EU. As the UK is not a net oil importer, the weaker oil prices has significantly helped the country’s trade balance.

However, UK exports increased by a meek £0.2bn, compared to a £2.8bn rise a month prior. The bulk of the export increase was helped by higher sales of silver in India, rising to £0.3m in October from £0.1bn in September.

As a result, had fuel prices not dropped, the deficit was likely to have widened. The global demand for other UK products and services has dipped in recent months, following a 12% increase in the value of the pound and weakened demand in emerging markets and Eurozone countries.

Wednesday's data was released shortly after the ONS admitted to overstating Britain’s exports to the US by more than £40bn over four years. The ONS said the error did not affect its current estimates of UK growth or account deficit.