Page last updated at 09:46 GMT, Wednesday, 10 September 2008 10:46 UK

UK's trade gap narrows slightly

Container ship
UK exports could get a boost from the weak pound

The UK's goods trade gap with the rest of the world shrank slightly in July, official figures show.

Analysts said a weaker pound, which makes UK exports more competitive on international markets, would help the trade deficit to shrink further.

The Office for National Statistics said that deficit stood at 7.7bn, compared with 8.0bn in June.

The deficit in trade in goods and services stood at 4.6bn, down from 5bn in June.

Exports rose by 2.5% from June, while imports climbed by 0.5%.

"Going forward, UK exporters will benefit from the markedly weaker pound; but, crucially, this seems set to be increasingly countered by muted demand in key overseas markets," said Howard Archer, economist at Global Insight.

The pound was trading at $2 in early July but now fetches $1.76.

An earlier version of this story erroneously said that the UK trade deficit was 8.8bn in June. It was, in fact, 8bn according to the Office for National Statistics.

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