The UK trade deficit in goods and services narrowed to £2bn in October as exports rose, official figures show.
Exports increased by £2bn, lifted by machinery and transport orders, while imports decreased by £1.8bn, the Office for National Statistics (ONS) said.
The ONS also made large revisions to trade figures for the period between January 2015 and September 2016.
It said it had made an error in the way it had recorded trade in gold.
September's
deficit was revised to £5.8bn from £5.2bn previously, while the deficit
for the third quarter of the year widened to £14.9bn from the previous
estimate of £11bn.
'Big disappointment'
Scott
Bowman, economist at Capital Economics, said: "While the monthly data
are extremely volatile, the narrowing in the trade deficit in October
sets a solid base for trade in the fourth quarter.
"What's more,
trade should be further supported in the coming months by the fall in
sterling seen since the EU referendum, which should improve exporters'
competitiveness and encourage domestic production at the expense of
imports."
However, Chris Williamson from IHS Markit pointed out
that "the big disappointment" was the fact that export volumes fell by
2.1% in October, while imports rose by 4.4%.
"Given the steep
fall in sterling, one would have expected this to be the other way
round, with exports rising and imports falling," he said.
The
pound has fallen sharply since the UK's vote to leave the EU. Against a
basket of currencies, sterling was 5.1% lower in October on average than
in the previous month and 18.5% lower than a year earlier, the ONS
said.
"Following the EU referendum, the UK trade deficit widened
in the third quarter of 2016 and then in October it narrowed again,"
said ONS statistician Hannah Finselbach.
"There remains only limited evidence so far that the depreciation of sterling has led to a marked increase in UK exports."
Construction fall
Exports to the EU rose by £0.2bn last month, led by sales in the Republic of Ireland and the Netherlands.
Separate figures from the ONS showed that construction output fell in October, down 0.6% compared with September.
Kate
Davies from the ONS said: "October saw the biggest jump in private
house building for almost a year though less work on commercial
buildings and infrastructure projects saw overall construction output
down on the month.
"Meanwhile, new construction orders fell in the
third quarter, thanks mainly to a large fall in orders for public
projects such as schools and hospitals."
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