Stronger flows of oil from the North Sea, boosted by the opening of the new Buzzard oilfield, helped to cut Britain’s trade gap with the rest of the world to its smallest in nearly two years in April, official figures showed yesterday.

The country’s global deficit on trade in goods shrank to a narrower than predicted £6.32 billion in April, the best figure since October 2005, from £7.16 billion in March. Economists had expected a much smaller decline to some £7 billion.

For the three months to April, the figures also showed that the global goods deficit was unchanged at £12.3 billion from the previous three month period.

April’s sharp improvement was driven by a steep fall in Britain’s deficit on trade in crude oil. The decline of the North Sea has left the nation in the red on its trade in crude since last May. But the opening of the Buzzard field cut the deficit for April to a modest £100 million, the lowest in a year, from £500 million in March.

The global deficit with the rest of the world on trade in goods and services combined was also sharply lower, at £3.6 billion in April, down from £4.5 billion in March to its best since July 2005.

Besides the better showing from North Sea production, the improvement in the UK’s April trade performance was substantially a result of weaker British demand for foreign goods as imports of products tumbled by 4 per cent in April, mirroring a drop in retail spending in the month.

The decline in imports outstripped a 0.9 per cent fall in the UK’s export volumes, which economists said raised concern that overseas trade may be faltering in the face of the strong pound. Analysts said these figures questioned the emphasis by Mervyn King, the Bank of England’s Governor, on Monday, on the impact of a robust global economy in boosting demand in the UK.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts