The U.K. trade deficit narrowed more than economists forecast in June as exports rose to a two-year high.
The goods-trade gap shrank to 7.4 billion pounds ($11.7 billion) from 8 billion pounds in May, the Office for National Statistics said today in London. The median of 17 forecasts in a Bloomberg News survey was for a 7.8 billion-pound deficit. Exports jumped 4.3 percent to the highest since June 2008, and imports rose 1 percent.
The pound has fallen about a quarter on a trade-weighted basis since the start of 2007, making exports more competitive. While economic growth accelerated in the second quarter, Bank of England Governor Mervyn King said there are risks from a possible euro-area slowdown. Policy makers may lower their growth forecasts tomorrow after last week maintaining emergency stimulus, according to economists in a Bloomberg News survey.
Ã¢â‚¬Å“At the margin this is a small improvement, but the data are volatile,Ã¢â‚¬Â said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. Ã¢â‚¬Å“There are questions over how sustainable the recovery is in export markets. ThereÃ¢â‚¬â„¢s a sense thereÃ¢â‚¬â„¢s been a loss of momentum.Ã¢â‚¬Â
The pound rose as much as 0.1 percent against the dollar after the report, and was trading at $1.5820 as of 9:44 a.m.
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