The UK deficit on trade in goods and services unexpectedly shrank from £2142mn in December 14 to £606mn in January 2015.
The main factor was a massive decline of £1994mn in core trade excluding oil and erratics (ships, aircraft, precious stones etc.). The deficit on the oil account fell by £422mn to £570mn, whereas the erratics balance worsened from a £774mn surplus to a deficit of £125mn, close to its recent average.
"Much of the big swing in the deficit excluding oil and erratics should have been reversed in February, taking it closer to the underlying trend. The other components should stay around their January levels so the overall deficit should rebound to £1500mn", said Societe Generale in a report on Thursday.
