By Jason Douglas and Wiktor Szary

LONDON--The U.K.'s goods trade surplus with the U.S. widened in the final three months of the year, data showed Friday, highlighting the challenge faced by President Donald Trump's administration as he pledges to narrow the country's trade gap with the rest of the world.

The U.K. surplus in visible trade with the U.S. stood at GBP3.4 billion ($4.25 billion) in the October-December period, over three times more than the GBP1.1 billion seen in the preceding quarter. Compared with the fourth quarter of 2015, the surplus widened by GBP0.9 billion.

Mr. Trump has put narrowing the U.S. trade deficit at the center of his economic policy, pledging to increase domestic manufacturing and curb the country's reliance on imports. During his meeting with British Prime Minister Theresa May last month Mr. Trump promised to negotiate a trade deal with Britain after it leaves the European Union. Britain has run a quarterly trade surplus in goods with the U.S. since 2003.

The widened surplus in the final quarter of 2016 may reflect a sharp weakening of the pound after the June 23 referendum, when Britons decided to leave the European bloc. Since the result of the vote, sterling has weakened by almost 20% against the U.S. dollar, making British exports more competitive.

The U.K.'s overall trade deficit in goods narrowed in December on a rise in exports of aircraft, oil and gold, a tentative sign that the pound's devaluation may indeed be helping Britain to close its own trade gap.

Britain's goods trade deficit fell to GBP10.9 billion in the final month of last year from GBP11.6 billion the previous month. The data comes after preliminary grossdomestic product figures showed that the U.K. economy expanded at the fastest rate among the Group of Seven advanced economies last year.

As the U.K. charts its exit from the EU, Britain's trade balance will become a closely watched proxy for the government's success in forging new economic relations outside the European bloc. However, economists warn that trade data can be volatile, and it might not be for some time until a clear pattern emerges.

Write to Wiktor Szary at Wiktor.Szary@wsj.com and Jason Douglas at Jason.Douglas@wsj.com

(END) Dow Jones Newswires

February 10, 2017 04:55 ET (09:55 GMT)

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