THE UK's trade deficit narrowed to £1.5 billion in July, according to figures from the Office for National Statistics.
The larger than anticipated drop from the record £4.3bn reported in June was welcomed by commentators.
Some economists warned the turnaround was partly due to the balancing of one-off factors seen in June when trading was disrupted by the extra bank holiday for the Queen's Diamond Jubilee.
Chris Williamson, chief economist at Markit, cautioned against expecting the UK to start pulling quickly out of recession.
He said: "A rebound in UK trade in July is a relief after June's data had shown the worst trade balance on record, and adds to hopes the economy pulled out of its double-dip recession in the third quarter.
"However, looking through the strong volatility in the numbers over recent months, the data also highlight the underlying weakness of demand both at home and in the UK's main export markets. While the economy may have rebounded in the third quarter, the underlying trend probably remains one of very weak growth at best."
Martin Beck, UK economist at Capital Economics, highlighted that the proportion of UK goods exports going to eurozone countries fell to 43.6%, the lowest share since records began in 1988, while monthly exports to non-EU countries reached a record high.
The ONS said there had been a deficit of £7.1bn on goods which was partly offset by an estimated surplus on services of £5.6bn
Exports of goods surged 9.3% to £25.8bn in July with oil one of the biggest contributors as it surged by £800 million.
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