The UK trade deficit narrowed to £2.8bn in March from £3.3bn in February, figures from the Office for National Statistics (ONS) show.
The country’s £10.1bn deficit in goods was bigger than expected, but was partially offset by a £7.3bn surplus in services, the ONS said.
Goods exports were 1.4% higher than in February, while imports were down 1%.
For the three months to the end of March, the deficit was £7.5bn, £1.5bn more than in the previous quarter.
The value of the pound has increased 10% against the euro since the beginning of the year.
This held back the UK’s exports in the first three months of the year, which were down £2.7bn on the previous quarter.
“The steady appreciation of sterling on a trade-weighted basis since the beginning of the year may have played a role in widening Q1’s deficit,” said Martin Beck, senior economic advisor to the EY Item Club.