A surprise jump in exports in March, contrasting with gloomy surveys, gave Britain its smallest shortfall in trade in goods for a year.
The pick-up in exports came mainly, but not entirely, from a recovery in exports of crude oil, which had been depressed in the first two months of this year, according to official numbers from National Statistics.
But exports of goods other than oil were also ahead to the tune of £259 million, while imports slipped marginally.
This trimmed the March deficit in trade in goods to £4.4 billion, down from over £5 billion in February.
The surplus from trade in services, though slipped by £ 213 million to £23.37 billion leaving an overall deficit of £ 3 . 075 billion, a £412 million improvement on February. NS, which concentrates on threemonthly comparisons, said the trend in all aspects of Britain's trade was still " fairly flat" in recent months.
Over the first quarter of this year the shortfall in all trade taking goods and services together narrowed to £10.1 billion from £10.5 billion in the final three months of 2004.
Within that, the deficit on trade in goods with EU countries was virtually unchanged on a threemonthly comparison, while outside the EU there was a £ 604 million improvement.
In March, the deficit on trade in goods with countries outside the EU narrowed sharply to £ 2 . 0 billion from £2.7 billion in February, the smallest monthly gap since March last year. It was largely the result of higher exports of intermediate and capital goods.
Exports of goods to these non-EU countries surged by 7.5 per cent, although NS warned that a new seasonal adjustment method introduced earlier this year made these figures less reliable on a month to month basis.
Analysts were generally surprised by the strength of the figures. Most had expected Britain's trade to worsen gradually as economic growth cooled off in much of the world.
"The reduction in the goods deficit is curious given what appears to be a global soft patch. Some of this appears to be due to oil and erratic items," said Philip Shaw, chief economist at Investec.