The UK's global trade deficit narrowed in October to £1.6bn - a big improvement on September's record £2.5bn shortfall. However, initial figures for trade with non-EU countries in November show a sharp rise in imports.

The October gap was lower than the £1.8bn forecast by economic analysts.

Trade Minister Brian Wilson welcomed the figures, saying they showed the UK's exporters bearing up under the international pressures.

"These figures suggest the September figures were well out of line and that Britain's exporters are continuing to fare reasonably well in the face of extremely difficult world conditions."

The government say trade figures are looking more optimisitc

Neil Parker, Treasury Economist at the Royal Bank of Scotland, warned against taking the global trade figures as a cue for optimism.

He said: "I do not think we should be happy when we have a £1.6bn trade deficit and there is no evidence that it is going to get narrower."

Mr Parker also said more attention should be paid to the November figures for trade with non-European Union countries which showed the deficit increasing to £1.8bn from £1.4bn in the previous month.

"People should also watch the non-EU figures more closely, they give a better view of where we are going," he added.

Export slowdown

His views were echoed by Gerard Lyons, chief economist at DKB who said:"The bottom line is that once you take into account the monthly deviations in these figures, the trend has deteriorated because exports have been hit and imports are still quite robust. If this trend continues, it could eventually weaken the pound but not just yet."

Andrew Milligan, economic adviser to the asset management arm of CGU, said: "We are getting a fairly worrying picture in the divergence in exports and imports with core volume imports up 7% per annum and core volume exports up 1% per annum. Obviously that will continue for some time to come.

"It is necessary that the US and the UK run larger deficits to help Asian economies recover."