The trade deficit was practically flat in the third quarter as import volumes rose more quickly than exports, offering a hopeful sign that domestic demand is recovering. The deficit shrank by £208m to £8.4bn in the three months to September, compared with a £1.2bn decline in the second quarter, the Office for National Statistics reported.

The slower improvement in the deficit with the UK’s trade partners came as import volumes rose at an almost 14 per cent annualised pace in the quarter and exports grew at an annualised 10 per cent rate amid a pick-up in trade globally.