UK trade deficit falls to lowest in over a year in April

LONDON (Reuters) - Britain's trade deficit with the rest of the world narrowed more than expected in April, suggesting that it might act as less of a brake on growth during the current quarter, official data showed on Tuesday.

The Office for National Statistics said Britain's total trade deficit narrowed to 1.202 billion pounds in April from an upwardly revised 3.093 billion pounds in March, its lowest since March 2014.

The deficit in goods alone narrowed to 8.561 billion pounds from 10.705 billion pounds, also the lowest since March last year, compared with economists' forecasts for it to drop to 9.9 billion pounds.

Britain's total trade deficit lopped 0.9 percentage points off quarterly economic growth in the first three months of this year, contributing to a disappointing overall expansion in gross domestic product of just 0.3 percent.

Tuesday's data revised down the first-quarter trade deficit by 219 million pounds, while the trade deficits for the third and fourth quarters of 2014 were each revised up by almost a billion pounds.

British exporters have struggled in the face of weak demand in the euro zone -- the most common destination for British exports -- and a rally in sterling to its strongest on a trade-weighted basis <=GBP> since August 2008.

But Tuesday's data offer some hope of a turnaround, with export volumes in April alone rising by 4.8 percent, the biggest increase since September 2014.

Britain's trade data is volatile on a monthly basis, however, and the ONS said that in the three months to April, exports were flat after 0.3 percent growth in the first quarter, while imports were up 2.1 percent, the same as in the three months to March.

German data on Monday showed that exports from Europe's largest economy rose by 1.9 percent on a seasonally adjusted basis in April, beating economists' forecasts for a 0.1 percent rise.

(Reporting by David Milliken and Andy Bruce)