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The UK's trade gap narrowed to its lowest level since July 2005 in April, according to new government figures.

With the level of imports falling faster than exports, the shortfall in goods and services trade declined to £3.6 billion in April, provisional data from the Office of National Statistics (ONS) showed.

The deficit had stood at £4.5 billion in March.

An improvement to the deficit on trade in goods was largely responsible for the narrowing of the trade gap, with levels down from a shortfall of £7.2 billion in March to a deficit of £6.3 billion in April.

The surplus on trade in services remained the same at £2.7 billion.

Within the enlarged European Union (EU) the trade gap narrowed to £2.4 billion compared with £3.3 billion in March, as oil exports increased and car imports declined.

Exports within the EU rose by £0.5 billion over the period, while imports fell by £0.4 billion.

However the trade deficit with countries outside the EU remained unchanged at £3.9 billion.

Commenting on the results, Global Insight's chief economist Howard Archer said a 13.8 per cent fall in exports to the US in April indicated that the pound's strength against the dollar and slower US economic growth had been a "significant problem" for British firms exporting to America.

He added that the data came with a usual "health warning" as a result of missing trade intra-community VAT fraud, also known as carousel fraud, which the ONS acknowledges makes it difficult to interpret the breakdown between EU and non-EU trade.

"As a result, it is important not too read too much into one month's figures and the Bank of England is certainly likely to be wary about drawing any major implications from the data in setting interest rates," said Mr Archer.