UPDATE 1-Northgate's outlook uncertain, UK fleet size falls

* 4 month rental sales up 1 pct in UK, Spain flat

* Spain bad debt charge 2 mln euros in last 4 months

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LONDON, Sept 9 (Reuters) - British van-hire group Northgate (NTG.L) said tough economic conditions continued to impact its business and that it had reduced the size of its fleet in the UK due to reduced demand over the summer months.

The company, which rents out light commercial vehicles in Britain and Spain, on Thursday said UK hire revenues had increased 1 percent since May and had been flat in Spain but trade remained difficult.

"Overall we are trading in line with our plans despite macroeconomic conditions continuing to adversely affect the group's markets, with the outlook for the UK and Spanish economies remaining uncertain," the company said in a statement.

It added that it had cut the size of its fleet to 58,800 at the end of August from 60,900 at April 30 due to reduced demand over the summer.

However, it expects the number of vehicles on hire to increase in the quarter to Christmas.

Northgate received a charge of 2 million euros relating to its bad debts in Spain in the four months to the end of August -- 1.4 million euros less than it was charged in the same period last year.

Shares in Northgate, which have risen a quarter in the last three months, closed at 200.25 pence on Wednesday, valuing the group at around 264 million pounds ($408.5 million).

(Reporting by Rhys Jones; Editing by Victoria Bryan)

($1=.6463 Pound)