Britain's goods trade gap narrowed slightly in July but the deficit on oil hit a record high, perhaps because of changing maintenance patterns at North Sea installations, official statistics showed today.
The Office for National Statistics said that Britain's goods trade gap shrank to £7.667 billion sterling in July from an upwardly-revised £7.993 billion in June. Economists had forecast a deficit of £7.5 billion.
The goods trade gap with non-EU countries was broadly flat at £4.726 billion versus £4.774 billion in June.
Analysts had forecast a deficit of £4.55 billion.
The deficit on oil hit a record high of £1.316 billion, up from £747 million in June. The oil deficit in the three months to July was also a record figure.
The ONS said the higher deficit might be due to changing maintenance patterns at North Sea plants and also the high price meant that small changes in volume could have a big effect.
But the oil balance has been in deficit since April 2006 as North Sea stocks have become depleted after a long period when Britain had plenty of its own reserves.
Asked about whether the weaker pound was helping to reduce the trade gap, the ONS said that the recent trend in the deficit had been fairly flat after a period of always increasing.
Sterling's trade-weighted index has fallen sharply over the last year and Bank of England policymakers are counting on the currency's weakness to help rebalance the economy and provide growth next year.
Some economists, however, have cautioned that poor economic conditions in the United States and Europe mean that this is unlikely, as demand for exports will also suffer.
"Weaker sterling at the margin is helping, although as you can see from other data there is a tendency on the part of the UK industry in responding to greater competitiveness to raise their prices rather than production of exports," said Ross Walker, economist at RBS.