The UK trade gap fell to its lowest level in more than 18 months during April, official figures showed today.
The country’s shortfall in goods shrank from #7.2 billion to #6.3 billion - its smallest level since October 2005 - as imports fell at a faster rate than exports.
Experts said the Office of National Statistics (ONS) figures could be taken as a "tentative sign" that four rises in interest rates since last August was cooling demand, as UK imports of goods excluding oil fell 3.4% during the month.
Global Insight’s chief UK economist Howard Archer said: "Taken at face value, the figures suggest that domestic demand is beginning to lose a bit of momentum, although it is important not to read too much into one month’s figures."
The decline in imports - seen most heavily in consumer goods, precious stones and cars - came at a quicker pace than the export falls seen after companies had to contend with a two-dollar pound during April.
Firms exporting to the US were the hardest hit, with a near 14% decline in exports to #2.4 billion, although exports to Europe rose nearly 6% in the month as the pound was weaker against the euro and the region enjoyed buoyant growth.
Other factors bringing the trade gap down included oil, where the deficit fell to less than #100 million from #500 million in March, as exports rose.
The UK’s trade deficit in goods and services narrowed from #4.5 billion to to #3.6 billion during April.
Despite the shrinking of the trade deficit between March and April, the latest three-monthly figures showed the trade deficit on goods widening slightly by #0.1 billion to #20.4 billion in the quarter to April.
The ONS said its latest estimate of trends suggested that the UK’s trade deficit was "fairly flat" in recent months.