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The UK's total trade deficit narrowed in November, driven mainly by a fall in the import of oil. However, a record deficit with EU partners threatens to undermine Chancellor George Osborne's recovery plans.
According to data from the Office for National Statistics (ONS) published on Friday (8 January), import of goods and services exceeded export by £3.2bn (€4.3bn, $4.6bn) in November 2015, down from the £3.5bn deficit in October.
The goods trade deficit with EU countries widened from £7.7bn in October to £8.2bn in November. The UK's trade surplus of services has dwindled slightly to £7.5bn in November from £7.7bn in October.
Although the numbers suggest a healthier trade balance, much needed for the government to "balance the books", economists have argued that it is not a signal for a long term trend. "November's improved UK trade figures are unlikely to be sufficient for the external sector to support the economy in Q4," said Scott Bowman, UK economist at Capital Economics.
Experts also warn that the numbers should be met with scepticism because of the allegations that the ONS figures are heavily flawed. Cross-party treasury select committee head, Andrew Tyrie, criticised the ONS in May 2014, and spoke against the data office again on Friday.
The slight narrowing of the trade deficit will be little relief for Osborne, who has warned of a "cocktail of threats" to the UK economy. The chancellor has been criticised for not doing enough to close the deficit.
Osborne said that the slowdown in China and other emerging markets and plummeting oil prices were a threat to the state of the UK economy. He made a series of seriously bearish remarks at a speech to business leaders in Cardiff.