U.K. TRADE FIGURES BUOY HOPES OF INTEREST RATE CUT The release of U.K. February trade data showing that the current account surplus was a provisional 376 mln stg, up from a 73 mln surplus in January, has boosted hopes of an early cut in interest rates, analysts said. Market forecasts had been for a worse outcome, with expectations of a deficit in visible trade averaging about 750 mln stg, against the official figure of 224 mln stg, sharply narrower than January's 527 mln deficit. "The figures are unreservedly good," Chase Manhattan Securities economist Andrew Wroblewski said. Sterling rebounded on the trade figures, reversing a weaker morning trend, to stand at 72.1 pct of its trade weighted index against a basket of currencies at midday, unchanged from yesterday's close but 0.3 points above the 1100 GMT level. The market had feared that a deteriorating non-oil trade pattern would undermine international support for sterling, which has been the motor behind the recent fall in U.K. Interest rates. Money market sources said the market had begun to doubt that a widely expected drop in bank base lending rates to 9.5 pct from the present 10.0 pct was really on the cards. But sentiment now looks to have turned about again. There now looks to be no danger that the Chancellor of the Exchequer Nigel Lawson's forecast of a 1987 current account deficit of 2.5 billion stg will be exceeded, said Wroblewski. Seasonally adjusted figures showed that imports rose in February to 7.16 billion stg from 6.73 billion in January. Exports rose to a record 6.93 billion from 6.20 billion. However, Chris Tinker, U.K. Analyst at brokers Phillips and Drew said that the faster rise in exports than imports would prove partly aberrational in coming months. He forecast the Chancellor's Budget tax cuts would increase consumer expediture on imported goods. However, Ian Harwood, economist at Warburg Securities, said his firm was sharply revising its 1987 current account deficit forecast in the light of the latest data, cutting one billion stg off the expected full year total to about 1.75 billion stg. He said news of strong growth in exports of non-oil goods confirmed recent bullish surveys among members of the Confederation of British Industry. The growth in imports appears to be flattening, even if January's bad weather had curbed consumer spending on overseas goods and import-intensive stock building among manufactureres, Harwood said. U.K. Government bonds, or gilts, surged by more than 1/2 point on the better-than-expected news, as earlier worries about the figures evaporated. Sterling peaked at a high of 1.6075 dlrs, before settling to a steady 1.6050 dlrs about 1300 GMT, nearly a cent higher than the European low of 1.5960. However, analysts noted that the turnabout in market sentiment still looks highly vulnerable to political news. Morning weakness in sterling and the gilt market was largely attributed to a newspaper opinion poll showing that the Conservative government's support was slipping. The Marplan poll, published in "Today," showed Conservative support had fallen to 36 pct, from 38 pct last month, while the Alliance of Liberals and Social Democrats had rallied to 31 pct, from 21 pct, to run neck and neck with the Labour Party, whose own support fell from 38 pct. The poll was taken after the Budget, which was greeted enthusiastically by financial markets but seems to have left the voters indifferent, political observers said. Another regular poll is due tomorrow, and eonomists warn that today's improved sentiment could be dented if support for Prime Minister Margaret Thatcher slips again. This upsetting of the markets' political perceptions, which are all but discounting a Conservative victory in the upcoming general election, made them more sensitive to the trade data, Harwood said. "The news did come as a very, very substantial relief," he said. However, on the interest rate front, economists caution that Lawson might be wary of leaving sterling vulnerable by encouraging another base rate fall. They noted Lawson had already got an inflation-reducing cut in mortgage rates in response to lower base rates, so domestic political reasons for lower rates have been curtailed.