The April deficit stood at a slightly smaller than expected £15.00 billion following an unrevised £16.36 billion in March. This was the smallest shortfall since last November and reflected a 2.1 percent monthly rise in exports together with a 1.4 percent fall in imports.

The deficit with the EU shrank from £10.89 billion to £9.96 billion, a 3-month low, as exports (minus 0.2 percent) declined less sharply than imports (minus 3.7 percent). With the rest of the world, the shortfall dropped from £5.46 billion to £5.04 billion with exports rising 4.3 percent and imports only 1.3 percent.

The trade data remain highly volatile but on a quarterly basis, the deficit looks to be broadly flat and sizeable somewhere close to the £45.0 billion level. More generally, at now 15 and 17 respectively, the UK's ECDI and ECDI-P remain above zero and indicate overall economic activity running just slightly ahead of market expectations.

The global goods shortfall is little changed at £16.5 billion in April.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Data are supplied by over 30 sources including several administrative sources, HM Revenue and Customs (HMRC) being the largest.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in the UK. Exports show the demand for UK goods in countries overseas. The pound sterling can be particularly sensitive to changes in the trade deficit run by the United Kingdom, since the trade shortfalls create greater net demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.

The UK's trade balance is particularly susceptible to swings in the oil account and so within the overall goods balance, financial markets will normally focus on the balance excluding oil and other erratic items.