The revival in key European Union economies was a central driver of the improved U.K. exports. Sales of goods to France and Germany increased by almost £700 million ($1.15 billion) in July from the prior month, more than two thirds of the total £913 million exports rise.
The U.K. global goods deficit was £6.5 billion in July, the Office for National Statistics said Wednesday. June's deficit was revised up from £6.4 billion.
The value of goods exports increased 5% in July on the month, the strongest rise since January 2008. Excluding oil, exports increased 4.5%, the strongest rise in a year. ONS said autos exports was the strongest sector, with exports rising 19%. Foreign sales of chemicals rose 7%, while exports of oil and other semi-manufactured goods also increased.
Imports of goods increased 3.5% from a month earlier, also the strongest rise since January 2008. Higher imports of capital goods and semi-manufactured products led the way.
However in the three months to July, exports remained 16.2% lower on the year, while imports were 17.2% lower.
Excluding oil and erratics, the global trade in goods deficit was £5.5 billion in July, which is the narrowest gap since March 2006.
Economists said there was every sign that U.K. exports could continue to increase.
The goods trade deficit with non-European Union countries widened to £3.9 billion in July from £3.7 billion in June.
The goods trade deficit with EU countries narrowed to £2.6 billion from £2.8 billion in June.
Export and import prices both fell 0.5% from a month earlier.