A report released on Friday showed that UK goods trade deficit narrowed to 9056 million pounds in March from 9165 million pounds in February. Exports advanced 3.5%, led by basic materials, while imports rose 2.6%, where the difference between exports and imports dropped by £0.9 billion (22.8 per cent) compared to February. The services trade balance reached 5.9 billion pound, while total trade deficit reached 3130 million pounds from 3391 million pounds. Trade deficit non-EU reached 3470 million pounds from 4208 million pounds, noting that the British pound has rebounded against the euro in March to take the pair down to a low of 0.8414 from a high of 0.8792. Yesterday, the BOE left both interest rate at 0.50% and asset purchases of 375 billion pounds after the economy have showed signs of progress and policymakers have renewed their confidence in the FLS scheme by extending it until 2015. UK gross domestic product figures showed that Britain managed to avoid a triple-dip recession after recording an expansion of 0.3% in the first quarter, following a 0.3% drop in the last three months of 2012. The British economy may continue to show improvement in the second quarter as manufacturing and construction sectors showed an ease in contraction in April while services signaled a widening expansion to give further positive signs the economy is on the right track of recovery. A report released yesterday showed that UK’s manufacturing resumed its advance for a second month in March, where factory output rose 1.1% in March after advancing a revised 0.7% in February, exceeding analysts’ estimates of 0.3% advance. Last week, the European Commission expected the British economy to “improve gradually” with 0.6% GDP growth this year, then 1.7% next year, and urged UK government not to relax fiscal policy.
