Boost for Chancellor ahead of Autumn Statement as trade deficit narrows

Britain's trade deficit narrowed to an estimated £1.4 billion in September while manufacturing achieved its largest monthly increase since April 2014, official figures show.

The data will provide a timely boost to Chancellor George Osborne, who is set to deliver his Autumn Statement speech later this month, although the longer-term data paints a less positive picture.

According to initial estimates from the Office for National Statistics (ONS), Britain's deficit on trade in goods and services was £1.6 billion lower than in August 2015.

But while the figures improved in the short term, Britain's third quarter deficit of £8.5 billion was still notably higher than the £5.1 billion reported in the previous quarter, the report noted.

Looking at manufacturing, the estimated monthly rise of 0.8% was the largest seen for 19 months, according to the ONS.

The strong uplift comes after numerous turbulent months for the sector, meaning manufacturing is still 0.4% lower in the third quarter when compared to the previous three months.

Lee Hopley, chief economist at manufacturers' organisation EEF, said the figures still provided reason for optimism.

"While manufacturing contracted in the last quarter there are signs that some parts of industry were at least mounting a comeback after a summer lull," she said.

"Together with the sharp rebound in October's PMI, we may yet see some more positive data readings in the remainder of 2015 but the risks from weaker activity in emerging markets are likely to present some headwinds for manufacturers into next year."

Overall, total production output in Britain increased by 0.2% between the second and third quarters, which is slightly lower than the 0.3% growth predicted in last month's GDP figures.