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UK trade deficit narrows in Q4, industrial production up

Staff Writer |
The UK trade deficit narrowed in the fourth quarter, boosted by an increase to exports to countries outside the European Union.

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The Office for National Statistics said the deficit narrowed to £8.6bn from £5.6bn the previous quarter.

The pound has weakened sharply since the UK voted to leave the EU last June, making exports cheaper for countries the UK trades with but sending imports costs higher.

Exports of goods increased by 10.4% quarter-on-quarter, while imports of goods increased by 0.9%.

However, the ONS said "erratic" commodities such as non-monetary gold, aircraft and oil contributed to trade in goods, potentially masking the underlying trend.

In December, the deficit on trade in goods and services was scaled back to £3.3bn from £3.6bn, which the ONS said contributed to the narrowing in the fourth quarter.

UK industrial production outpaced forecasts by a wide margin at the end of 2016, prompting a very positive reaction from some economists.

Total output jumped by 1.1% month-on-month, with factory output ahead by 2.1% even as Mining & Quarrying saw production fall 1.1% and Electricity and Gas was down by 2.0%. Water supply output was steady.

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