UK trade deficit narrows in January

The UK's trade deficit narrowed in January, official figures show, but its goods trade gap with the EU widened to a record level.

The Office for National Statistics (ONS) said the total trade deficit - covering goods and services - shrank to £3.5bn from £3.7bn in December.

The deficit in goods alone narrowed to £10.29bn - down from £10.45bn the previous month.

However, the goods trade deficit with the EU widened to £8.1bn, from £7.4bn.

Trade with the EU is coming under more attention because of the UK referendum on EU membership on 23 June.

Howard Archer from IHS Global Insight said UK exports remained "lacklustre in January, with the modest narrowing in the trade deficit being primarily due to a fall in imports".

The ONS said the narrowing of the total goods deficit between December and January was down to a drop in imports of £0.2bn.

Separate figures from the ONS showed that output in the UK's construction sector fell by 0.2% in January.

The figure was weaker than expected and comes after a 2.1% increase in output in December.

However, the ONS also said that during the final three months of 2015, construction output rose by 0.3%, whereas it had previously estimated that output fell by 0,4% in the quarter.