Trade balance with Europe has slipped

The Office for National Statistics said the value of goods imported into the UK outstripped the value of UK exports by �3.1bn in April, down from �3.4bn in March.

Analysts had predicted that deficit would widen to �3.5bn.

The improvement was entirely down to a shift in the balance of trade with countries outside the European Union (EU).

The non-EU trade gap fell to �1.4bn from �2.3bn in March, the lowest deficit since September 1999.

The narrower gap partly reflected an 11.3% increase in exports.

Most analysts had predicted the deficit would grow to �2.5bn.

Falling oil prices

However, exports to other European countries fell, widening the EU trade gap to its biggest since March 1990 - at �1.7bn, up from �1bn in March.

The ONS said it was too early to say if the growth in the EU deficit was part of a new trend, but said that around half of the deterioration was due to falling oil prices.

The UK's trade in services generated a �1.2bn surplus in April, compared with �1.3bn in March.

Trend still negative

The ONS said there were significant revisions to the data for 2003, particularly for exports to non-EU countries, as customs authorities changed their computer systems.

In the three months to the end of April the balance of trade in goods and services was �5.4bn in deficit.

This compares with a �5.7bn deficit in the previous three months.

The latest estimates suggests that the UK trade deficit is still widening, the ONS said.