The UK's trade deficit closed in November as exports caught up slightly with imports, according to the Office for National Statistics.

The deficit on goods and services totalled £3.5bn in November, compared with £3.7bn in October.

There was a deficit of £9.2bn on goods, partly offset by an estimated surplus of £5.7bn on services.

However, Dr Howard Archer, Chief UK Economist at IHS, said while the trade deficit narrowed in November, the improvement was relatively limited.

"It still looks more likely than not that net trade was negative in the fourth quarter, thereby increasing the risk that there was a renewed dip in GDP," he said.

Exports grew by 1.7% month-on-month in November, although they were still down by 1.0% on a three-month/three-month basis.

The figures were lifted by a 8.9% jump in exports of traded goods to EU countries, with sales to Germany seeing a marked rise.

However, exports of traded goods to EU countries were still down by 5.9% year-on-year in the three months to November, highlighting their underlying softness.

The UK's total goods exports increased by 2.9% to £24.8bn, led by sales of chemicals, while imports rose by 1.1% to £34bn.

Services exports in November were estimated to have been £15.5bn and imports £9.8bn, unchanged on the month before.

In the three months to November, the estimated surplus on trade in services was £17.3bn.

For their part, economists at Barclays Research had this to say: "The poor trade performance has been driven by export weakness both to the euro area and other trading partners. Slowing external demand explains this to some extent, but there is also some evidence that the UK has been losing market share.

"This could reflect two factors: the boost to competitiveness from the sterling depreciation may be waning; and weaker global demand for some of the UK's main exports, particularly financial services. In fact, the real effective exchange rate has appreciated in recent months. We expect a gradual improvement in the exports picture this year."

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